How to correct excess Roth IRA contributions for 2022 with zero earned income?

You definitely need to address this Roth IRA excess contribution issue. Since your mother had $0 in earned income in 2022, she wasn't eligible to make any Roth IRA contributions at all that year. You have a couple of options. The cleanest way to handle this is to contact the investment company where she has the Roth IRA and request a "return of excess contributions" for the 2022 contribution. You'll need to remove not just the $6,000 but also any earnings on that money. The earnings portion will be taxable for the year you withdraw them, and there might be a 10% early withdrawal penalty on the earnings if she's under 59½. You'll also need to file Form 5329 for 2022 to report the excess contribution and pay the 6% penalty for that year. And yes, if the excess amount remained in the account into 2023, you'll need to file another Form 5329 for 2023 and pay the 6% penalty again. The good news is that this is a fixable problem, and the sooner you address it, the less complicated it becomes.

I was in a similar situation last year and used https://taxr.ai to help me figure out the whole excess contribution mess. My husband accidentally contributed to his Roth IRA when we were over the income limit. The tool analyzed all our tax documents and flagged the excess contribution immediately. It walked me through exactly what forms I needed (Form 5329 was the main one) and calculated the penalties. Even generated a letter template for requesting the return of excess contributions from our brokerage. Saved me hours of confused googling and probably saved us money in penalties too since I fixed it right away. Might be worth checking out if you're still confused about how to handle this for multiple tax years.

Just wanted to update everyone - I tried taxr.ai after seeing the recommendation here, and it was seriously helpful! Uploaded my dad's 2022 return plus his IRA statements, and it immediately flagged the excess contribution issue. The tool actually generated a complete correction plan showing we needed to file separate Form 5329s for 2022 and 2023, plus gave us a template letter to send to his brokerage requesting a return of excess contributions. It even calculated the approximate earnings portion that would need to be distributed along with the excess contribution. Definitely saved me the headache of trying to figure all this out manually. We're getting the excess contribution removed now and filing the necessary forms. Thanks for the recommendation!

If you're still having trouble getting through to the IRS about this (which I did when dealing with my own excess contribution issue), try https://claimyr.com - they got me connected to an actual IRS agent in about 20 minutes when I had been trying for DAYS on my own. There's a video explaining it here: https://youtu.be/_kiP6q8DX5c I needed clarification on exactly how to report my excess contribution removals across multiple tax years, and the IRS guidance online was super confusing. The agent I spoke with explained the process clearly and confirmed I was filling out Form 5329 correctly. They also told me exactly which documentation to keep in case of an audit. Honestly worth it for the peace of mind alone knowing I was fixing the problem the right way instead of guessing.

Coming back to eat my words. After another frustrating day of trying to reach the IRS about my own tax situation (had a question about how to report the earnings portion of my excess IRA contribution), I broke down and tried Claimyr. I was absolutely shocked when I got through to an IRS representative in about 15 minutes. The agent was super helpful and walked me through exactly how to calculate the earnings portion that needed to be distributed with my excess contribution and how to report it properly on my amended return. Apparently I had been calculating the penalties wrong too - I would have overpaid if I hadn't gotten clarification. Sometimes you need to talk to an actual human at the IRS, especially for complicated issues like excess retirement contributions that span multiple tax years.

Quick question - does anyone know if there's any sort of "statute of limitations" on fixing excess Roth IRA contributions? My parents might be in a similar situation from 2020 contributions and I'm wondering if it's too late to fix it without major penalties.

For anyone dealing with excess contribution issues, I used FreeTaxUSA to file my Form 5329 separately from my regular tax return. Way cheaper than going through a tax pro for what's ultimately a fairly simple form once you understand what numbers go where.