Recharacterizing Roth IRA to traditional IRA- reporting earnings

Forum|Forum|1 year ago
March 4, 2025
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I contributed $7500 to a ROTH IRA in 2023. in 2024, I realized I was not eligible to a ROTH contribution because of my MAGI limit. So Fidelity helped me to recharacterize this to a non-deductible traditional IRA. at time of recharacterization, the value of the ROTH IRA was about $8755.

In 2025 I received the 1099-R for this recharacterization. Gross distribution $8733 in row 1 and taxable amount 0 in row 2. Row 7 was R. when entering this 1099-R in turbo-tax, it alerted me that i had earnings on my 1099-R and may need to amend my 2023 tax return.

How should I amend my 2023 tax return. Thanks

Best answer by dmertz

The message from 2024 TurboTax is simply a reminder that the recharacterization needed to be reflected on your 2023 tax return. As long as you entered the $7,500 Roth IRA contribution and indicated during that process that you "switched" $7,500 to be a traditional IRA contribution instead, you've done what you needed to do and there is no need to amend. The $1,233 of earnings while in the Roth IRA simply became earnings in the traditional IRA.

You can confirm that your 2023 tax return has already been filed correctly by seeing that you either have a $7,500 deduction for a traditional IRA contribution shown on 2023 Schedule 1 line 20 or a $7,500 nondeductible traditional IRA contribution on Form 8606 line 1 (or a combination of the two totaling $7,500).