TT is assessing a penalty for a contribution only withdrawal from Roth IRA

Forum|Forum|11 months ago
April 14, 2025
1 reply
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Good evening.

i withdrew $12000 from a Roth IRA (contribution only withdrawal) in 2024. I was understanding that since this is “after tax” and not earnings, there would be no tax liability or penalty. Line 7 shows distribution code of “J” meaning early distribution. But TT is assessing a 10% penalty anyway. Any ideas on how to correct this?

Thanks!

dmertz

You must clink the continue button on the page that lists the 2024 Forms 1099-R that you have entered and, when asked, enter the amount of your basis in Roth IRA contributions from years prior to 2024. You must also separately enter any Roth IRA contributions that you made for 2024. TurboTax will then prepare Form 8606 Part III to calculate the taxable amount, which will be zero if your basis in Roth IRA contributions is greater than the $12,000 distributed.