Excess Roth IRA contribution, & removal

Forum|Forum|2 months ago
April 12, 2026
3 replies
0 views

Never had to do this before:

30 year old client had a $2,723 excess ROTH IRA contribution carried forward to 2025 from 2024, because his 2024 earned income was only $4,277. He already contributed $7,000 to his 2025 ROTH IRA from his 529 QTP. Today is April 12, 2026. How does he avoid paying a 6% penalty in 2025 (he already paid it once in 2024)? If he did a "return of excess", would that only be the $2,723, or would there be any additional amounts?

ProSeries Professional

Skylane

Intuit Community Champion

It would be 2723 + any earnings … IMO,he should have been more proactive in 2025… maybe he will be in 2026.

If at first you don’t succeed…..find a workaround

IntuitAmyC2

Level 4

The correction window has closed for 2024 so it isn't tax free now. He can:

take the excess -he doesn't seem interested or
reduce the 2026 contributions and stop paying the excess penalty in 2026.

I agree with Skylane that taking the earnings may not be required this late but why leave excess earnings there to keep being taxed. It all needs to be absorbed so the client may need help understanding the full amount between you and the broker. Good luck!

qbteachmt

Level 15

"How does he avoid paying a 6% penalty in 2025 (he already paid it once in 2024)?"

It's taxed every year until it gets removed or allocated.

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