1099-r form with distribution code P

[rn22]

Hello All

I have a client who received a 1099-R form in 2023 with a distribution code of P.

Box 1 is a 280K+ amount, box 2a is 3K+ amount, with federal and state taxes withheld.

Should a separate 1099-r form with code 8 been received? or is everything correct with this single form.

how do I report the amounts?

1. Report the box1 amount as taxable income in 2022 on Schedule 1 other income; and not entering the actual 1099-r form as received.

2. enter taxes withheld on tax payments page.

basically, amend the 2022 return with above changes.

What about box2a amount? where and how does that get reported?

This is my first time encountering this, so not sure what the correct way is.

Thank you for your guidance.

[Terry53029]

It sounds like your client removed excess contribution to an IRA. box 1A should be non taxable. Box 2b sounds like the earnings which if earned in 2022 you would have to amend 2022 to add the earnings

[rn22]

Thank you for taking the time to answer my questions.

My concern is over 40K+ were withheld for federal taxes.

If the box1 amount is non-taxable, what's the logic in withholding such an excessive amount?

Thanks again.

[qbteachmt]

Here is the help article:

https://accountants.intuit.com/support/en-us/help-article/form-1099-r/entering-form-1099-r-proseries...

"how do I report the amounts?"

As 1099-R

"1. Report the box1 amount as taxable income in 2022 on Schedule 1 other income"

It's not Other. It's 1099-R specific. Expand the sections of that help article to see: "Check box A5 Code P or R on a 2023 Form 1099-R." Have you confirmed it isn't already reported? "P" reflects that it was done in time for the prior year's tax filing, and this form is an informational follow up. Or, at the least, it applies to the prior year. So, you must amend the prior year if it was not already reported in the prior year. It could already have been reported without having the 1099-R.

"My concern is over 40K+ were withheld for federal taxes."

That's a huge distribution amount to be a basic annual amount as corrective distribution. Are you use that isn't something more extreme, such as, the plan turned out not to be qualified?

[rn22]

Thank you for your detailed response. Will have a chat with the client to find out exactly what happened.

[TaxGuyBill]

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@rn22 wrote:

My concern is over 40K+ were withheld for federal taxes.

If the box1 amount is non-taxable, what's the logic in withholding such an excessive amount?

---

That is very bizarre. 

[rn22]

An update:

Apparently, the client made a mistake in filling out a form for distribution. Instead of checking the normal distribution box, he checked on the return of excessive distribution box and the payer without any comment accepted the form as is. And then sent out the 1099-R form with code P.

Have asked the client to request for a corrected 1099-R form with code 1.

[qbteachmt]

"he checked on the return of excessive distribution box and the payer without any comment accepted the form as is. And then sent out the 1099-R form with code P."

You mean, return of excess contribution.

So, what your taxpayer did is ask for this large distribution, and there is required withholding. If Fed was $40k, well, there is a required withholding of at least 10%.

And since it wasn't really returned contribution, it's likely all taxable, unless you know there is basis.