Distribution Code on 1099-R for Excess Roth IRA Contribution Removal

The distribution code on your 1099-R will depend on when you made the contribution and when you removed the excess. Since you contributed in January 2023 for tax year 2022, and then removed the excess in 2023, your 1099-R will most likely show distribution code 8 with no J qualifier. Code P is specifically for excess contributions plus earnings removed before the tax filing deadline (including extensions) for contributions made in the prior year. The J code indicates an early distribution from a Roth IRA. Since you're removing an excess contribution within the same tax year that you made it, the excess removal is treated differently than if you were removing it after the tax year of contribution.

I had a similar situation last year and found https://taxr.ai super helpful for sorting it out. I was so confused about my 1099-R codes after accidentally overcontributing to my Roth IRA. The tool analyzed my tax documents and explained that for excess contributions removed in the same calendar year, it would likely be code 8 without the J qualifier, just as the previous commenter mentioned. What I also learned is that the timing really matters - removing excess contributions before the tax filing deadline (including extensions) helps avoid the 6% excess contribution penalty. The system even showed me exactly where to report this on my tax forms so I didn't mess anything up.

I actually tried taxr.ai after seeing the recommendation here, and it really helped me understand my own distribution code confusion. I had a similar issue with an excess contribution to my IRA, and my 1099-R had a code I didn't understand. The tool analyzed my form and confirmed it was properly coded as an excess contribution removal. It also highlighted that I needed to report it on Form 8606 and explained exactly how to complete the form correctly. Saved me from almost certainly making a mistake that would have triggered an IRS notice. Definitely worth trying if you're confused about tax form codes!

After reading this thread, I wanted to share something that helped me resolve a similar issue. I spent WEEKS trying to call the IRS to verify how to handle my excess contribution removal (different situation but similar confusion). Constantly getting busy signals or disconnected after hours on hold. I finally used https://claimyr.com and their service connected me with an IRS agent within 45 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent confirmed that for my situation, removing an excess contribution made in the same calendar year would typically be reported with code 8, not PJ. They also verified I wouldn't need to file an amended return as long as I properly reported the distribution.

I tried Claimyr after posting my skeptical comment, and I have to admit I was completely wrong. After months of failing to reach anyone at the IRS about my excess Roth contribution issue, I got connected to an agent in about 30 minutes. The agent confirmed exactly what I needed to know about distribution codes for excess contribution removals and explained that my situation (similar to the original poster's) would likely result in a Code 8 on my 1099-R. He also explained I wouldn't need to file an amended return if I reported it correctly on my original return. I'm still shocked this actually worked when nothing else did!

Just wanted to add that the important thing here isn't just the distribution code but making sure you properly report the removal of excess contributions on your tax return. Even if the 1099-R shows code 8, you need to make sure you don't pay taxes twice on the same money. The key forms to pay attention to are Form 8606 and Form 5329. Form 8606 tracks your Roth IRA basis, and Form 5329 is where you'd report excess contributions. If you removed the excess before the filing deadline (including extensions), you can avoid the 6% excise tax on excess contributions.

Has anyone actually received a 1099-R with code 8 (no J) for an excess contribution removal? I'm dealing with something similar and my broker is telling me they'll use code P, even though I also contributed and removed in the same calendar year. I'm wondering if different brokerages handle this differently.

I went through this exact situation last year and can confirm what others have said about the distribution codes. My contribution was made in January 2023 for tax year 2022, and I removed the excess in late 2023. My 1099-R showed code 8 (not PJ) because both the contribution and removal happened in the same calendar year. The key thing I learned is that you don't need to file an amended return as long as you report the distribution correctly on your original return. Since you mentioned your brokerage adjusted for losses, make sure you report any earnings (or in your case, the small loss) appropriately. The excess contribution removal itself isn't taxable, but any earnings would be. I'd recommend double-checking with your brokerage about exactly what they'll report on your 1099-R, since different institutions sometimes handle these codes differently. But regardless of whether they use code 8 or P, the tax treatment should be the same for your situation.