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earnings on excess IRA contrib

Forum|Forum|5 years ago
April 1, 2021
5 replies
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Client contributed to IRA in 2020 but is filing MFS. He withdrew the contrib in March 2021. It had earnings. The excess contribution will be reported (and not taxed) on a 1099R in 2021, but the earnings are supposed to be reported in the year the excess contribution was made, 2020. My question is where and how do you report these earnings without a 1099R for 2020?

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Best answer by JRC

Create a 1099R entry for the Excess Earnings only. Distribution Code for Roth was 8 & J. For Early Distribution from Roth. Ask for their EIN#

JRCAnswer

Level 7

Create a 1099R entry for the Excess Earnings only. Distribution Code for Roth was 8 & J. For Early Distribution from Roth. Ask for their EIN#

taxtime527Author

Level 3

Thanks JRC!

Level 13

Was the client relying on spousal earned income for the contribution limit? Filing MFS does not necessarily mean (s)he cannot contribute to an IRA.

taxtime527Author

Level 3

The client is not relying on spousal earned income for the contribution. They choose to file MFS due to student loans.

taxtime527Author

Level 3

They are both covered by plans through work.