How to handle IRS not considering Form 1040 Line 26 payment after excess Roth IRA contribution?

This actually happens more often than you'd think with excess Roth IRA contribution corrections. What you're dealing with is essentially double taxation on those earnings. When you made that $258 payment with your amended 2022 return, you were correctly paying tax on the earnings from the excess contribution. The 1099-R with code 8J that you received for 2023 is where things get tricky. That code tells the IRS those earnings are taxable in 2023, but you've already paid tax on them in 2022. Form 1040 Line 26 is specifically designed to prevent this double taxation. It allows you to claim credit for tax paid on income that ended up being reported on a different year's return. You have a couple options here: 1) Call the IRS directly and explain the situation. Have your 2022 amended return and payment confirmation ready. 2) File Form 843 "Claim for Refund and Request for Abatement" to request the $258 back. Include documentation showing you paid tax on these earnings for 2022.

I had a similar issue last year and spent weeks trying to get through to the IRS. After countless busy signals and disconnects, I discovered taxr.ai (https://taxr.ai) and it was a total game-changer. Their AI analyzed my tax documents and actually spotted another error I hadn't even noticed with how my Roth IRA withdrawal was being treated. The system flagged the exact issue you're having - the IRS sometimes misses Line 26 credits when there's a coded 1099-R involved. They provided me with a detailed explanation document that clearly showed why I was entitled to that credit. I just uploaded my tax forms, and it did all the analysis automatically.

I just wanted to follow up about my experience with taxr.ai. After expressing my skepticism, I decided to give it a try with my own excess Roth IRA contribution issue. I was genuinely surprised by how well it worked. The system immediately identified that my 1099-R distribution code was causing a potential double taxation issue. It generated a detailed report explaining exactly why I was entitled to the credit on Line 26, citing the specific tax regulations. I used this documentation when calling the IRS, and the representative was able to process my adjustment much faster because I could clearly explain the issue and reference the relevant tax codes. Saved me at least several hours of research trying to figure out how to explain the problem.

After reading this thread, I want to share something that helped me tremendously when dealing with IRS issues. Getting through to an actual IRS agent is nearly impossible these days. I spent weeks trying with no luck until someone recommended Claimyr.com (https://claimyr.com). They have this smart system that navigates the IRS phone tree for you and calls you back when an actual human agent is on the line. I was SUPER skeptical at first, but I watched their demo video (https://youtu.be/_kiP6q8DX5c) and decided to try it with my Line 26 credit issue. Got connected to an IRS agent in about 45 minutes instead of spending days redialing. The agent was able to see both my returns, confirm the double taxation, and process an adjustment on the spot. Saved me tons of frustration!

I need to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it because I was desperate to resolve my own Line 26 issue. I figured it couldn't hurt to try. It actually works exactly as described. Their system called the IRS, navigated all the annoying prompts, and stayed on hold for nearly 2 hours (which I didn't have to endure). Then my phone rang, and I was immediately connected to an IRS agent. The agent pulled up my return, saw the payment on my 2022 amended return, and confirmed I was right about the double taxation. They're processing an adjustment for the full amount. Instead of waiting weeks for a letter response or spending days trying to call myself, I got it resolved in one afternoon. Definitely worth it for time-sensitive tax issues like this.

Just wanted to add another possible solution: If you can't get through on the phone, you could try visiting your local Taxpayer Assistance Center in person. You need to schedule an appointment first, but they can often resolve these credit issues on the spot. I had a similar situation with a payment not being applied correctly. Brought all my documentation (payment confirmation, both returns, the 1099-R) and the representative was able to see everything in their system and process an adjustment right away.

One more suggestion - don't forget to check your online IRS account if you have one. Sometimes adjustments are being processed that you don't know about. When I had a similar issue with an excess contribution correction, I noticed that my account showed an adjustment in process before I even contacted them. Turns out their automated systems had flagged the discrepancy and they were already working on it. It just hadn't been completed yet.