Reporting excess Roth contribution withdraws

Submitted by Leesa Hollenbaugh on Fri, 2023-03-24 11:18

I made contributions to my Roth IRA 2018-2022, no realizing there was an income limitation. I realized it in March 2022 and withdrew 2017-2022 contributions. I filed amended 5329’s for 2018-2021 (I had not yet filed my 2022 tax return) and paid the 6% excise tax for those 4 years. I received no earnings in my withdraws because the stock market tanked. I have now received 3 1099R’s.
1099R code 8J: $501 – 2022 excess contribution
1099R code PJ: $4,638 2021 excess contribution
1099R code J: $12,856 – 2017-2020 excess contribution

I have $12,856 on line 1 of my 2022 Form 5329 (excess contributions from line 24 of the 2021 Form 5329) and have entered $12,856 on line 20, 2022 distributions from Roth IRA’s. I have this entered here because the 1099R has code J, not PJ.
I have $12,857 on line 19 of my 2022 Form 8606, Total Non-qualified distributions from Roth IRA’s and the same amount on lines 20 & 21
I have $13,358 on line 4a of Form 1040 ($501+$12,856)

I’ve read that I have to report 1099R’s with code P on the prior year tax return so my question is, do I file another amendment for 2021 and complete Form 8606 showing the $4,638 on lines 19, 20 & 2021 and then show the same amount on line 4a of the 1040?



Submitted by David Mertz on Fri, 2023-03-24 13:01

  • “I filed amended 5329’s for 2018-2021.”  I’m not sure why you said you withdrew your 2017 contribution if the $12,856 represented just your excess contributions for 2018 through 2020.  If the $12,856 included an excess contribution for 2017, you should also have filed a 2017 Form 5329 for this excess contribution.
  • “I have $12,857 on line 19 of my 2022 Form 8606, Total Non-qualified distributions from Roth IRA’s and the same amount on lines 20 & 21.”  I think you meant to say, “I have $12,856 on line 19 of my 2022 Form 8606, Total Non-qualified distributions from Roth IRA’s and the same amount on lines 20 & 21 of 2022 Form 5329.”  Assuming that, everything you’ve described sounds correct (except possibly the years for which you needed to file the Forms 5329.  Your basis in Roth IRA contributions on Form 8606 line 22 would be $12,856 or more, so the code-J distribution is not subject to any tax or penalty.
  • Regarding the code PJ Form 1099-R, there is no need to amend your 2021 tax return because there was no taxable gain included in the distribution.  Your 2021 tax return should have included an explanation of this return of contribution, but if it did not there is probably no reason to file an amendment just to provide that explanation.  There is no place on Form 1040-X to provide the line-4a amount that would have been on Form 1040 and you don’t send Form 1040 with an amendment.  Just be prepared to provide explanation to the IRS if the IRS asks about this return of contribution.
  • Your 2022 tax return should include an explanation statement regarding the return of 2022 contribution that was reported on the code-8J Form 1099-R.

Submitted by Leesa Hollenbaugh on Fri, 2023-03-24 13:20

My original post was incorrect, I only over-contributed 2018-2022 and only withdrew the excess for those year.  I filed amended 5329’s for 2018-2021.  Thank goodness I don’t need to file an amendment for 2021.  Thank you again so much as I lost sleep over this last night!

Add new comment

Log in or register to post comments