2023 Excess Roth IRA contributions

Forum|Forum|2 years ago
February 27, 2024
1 reply
0 views

I have been following the threads on this issue, creating a substitute 1099-R, put contributions plus earnings in box 1, earnings in box 2a, codes J and P in box 7. This all worked great for my federal return, but my NJ state return is taxing the entire amount (contribution and earnings). Turbo Tax says this is because code J is in box 7.

Is there a way to fix the NJ return so only earnings are taxed?

TurboTax Premier Online

Best answer by DanaB27

You will need to include the excess contribution amount in the contribution amount previously taxed during the NJ state return:

On the “You've Finished Your New Jersey Return” click “Update” next to “Adjustments”
Continue until you get “IRA Information” screen:

If this is the first year of withdrawal then select “Yes, this was the first year of withdrawal from this IRA” enter your contribution (including the excess contribution for 2023) next to “Total of IRA contribution previously taxed”
If you withdrew funds before 2023 then select "No, I've made withdrawals from this account before" and click “Continue” and enter on the “IRA Withdrawal” screen your contribution (including the excess contribution) for 2023 next to “Taxable Contributions Made to IRA during 2023”

DanaB27Answer

You will need to include the excess contribution amount in the contribution amount previously taxed during the NJ state return:

On the “You've Finished Your New Jersey Return” click “Update” next to “Adjustments”
Continue until you get “IRA Information” screen:

If this is the first year of withdrawal then select “Yes, this was the first year of withdrawal from this IRA” enter your contribution (including the excess contribution for 2023) next to “Total of IRA contribution previously taxed”
If you withdrew funds before 2023 then select "No, I've made withdrawals from this account before" and click “Continue” and enter on the “IRA Withdrawal” screen your contribution (including the excess contribution) for 2023 next to “Taxable Contributions Made to IRA during 2023”

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

jlquestAuthor

Thanks, that helped a lot.

The NJ return now shows only the earnings from the withdrawal as income and not the contribution.

However, on final check, I get the following message:

Check this entry:

Pensions, Annuities and IRAs Wks- TP: Part A, Line 4A and Part A, line 4b should not both be entered.

Line 4a First year of withdrawal from IRA:

Enter the total of IRA contributions previously taxed contains the contribution amount

Line 4b After first year of withdrawal from IRA (from Part B, line 7) contains a zero.

Can I go ahead and submit the return as is, or is there a way to correct this message?

Thanks.

DanaB27

Please go back to the State interview to clear entries to correct the error:

On the “You've Finished Your New Jersey Return” click “Update” next to “Adjustments”
Continue until you get “IRA Information” screen.
Select "No, I've made withdrawals from this account before" and click “Continue”
Make sure all fields are blank
Click “Back”
Select “Yes, this was the first year of withdrawal from this IRA”, verify that the contribution amount is still entered next to “Total of IRA contribution previously taxed” and click “Continue”