Excess ROTH Ccontribution
Client made a 2022 ROTH contribution was not eligible.
They are having the excess contribution plus earnings refunded prior to 2022 tax filing deadline.
What year are the earnings on the excess contribution taxable?
Client made a 2022 ROTH contribution was not eligible.
They are having the excess contribution plus earnings refunded prior to 2022 tax filing deadline.
What year are the earnings on the excess contribution taxable?
Permalink Submitted by Alan - IRA critic on Tue, 2023-03-07 03:29
Good chance that 2022 generated a loss on the contribution, but if there were gains the 1099R should be coded to show the gain in Box 2a taxable in the year the contribution was made (either 2022 or 2023). There is also a new provision in the Secure 2.0 Act that there is no longer a penalty on any taxable gains distributed as part of a corrective distribution.