Excess Contribution Simple IRA

Forum|Forum|1 year ago
March 9, 2025
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I made an excess contribution to my Simple IRA is November 2023. I realized my error in 2024 and took a gross distribution from my Simple IRA in January 2024. The 2024 gross distribution included the original excess contribution plus additional taxable income derived from the excess contribution. At the time of the gross distribution I withheld State and Federal tax equal to the entire taxable amount of the additional taxable income. I received a 2024 1099-R that documents these transactions. It includes a Code P that is taxable in 2023.

When I attempt to enter this data in my 2024 tax return, Turbotax Premier states that I must amend my 2023 return. When I attempt to amend my 2023 in Turbotax Premier, it does not have drop down box Code P for 2023, it only has a Code P for 2022. It appears to me that the 2023 program does not include an option for individuals who are amending a 2023 return for a Code P 2023. Is there a work around?

DanaB27

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2022" but you can ignore this and select code P since the follow-up question will tell TurboTax that it will be taxable in 2023.

In your 2023 amended return:

Click on the "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Enter the Form 1099-R
On the "Which year on Form 1099-R" screen say that this is a 2024 Form 1099-R.
Click "Continue" after all 1099-R are entered and answer all the questions.
Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings from box 2a under "Corrective distributions made before the due date of the return".

Please note you must also enter the 2024 Form 1099-R into the 2024 tax return since the withholdings are reported in the year that the tax was withheld. The 2024 code P will not do anything to your income to the 2024 tax return income but the withholdings will be applied to 2024.

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