Contributed by: Henry, FreeTaxUSA Agent, Tax Pro
The correction window is the period of time when you can remove an excess Roth IRA contribution and treat it as though the contribution was never made. This window closes on your tax filing deadline, including extensions. If you remove the excess after that deadline, the withdrawal is considered untimely, and the 6% tax applies for each year the excess contribution remains in the account.
Excess contribution example:
James made an excess Roth IRA contribution for 2025 but fell behind on filing his tax return. He discovered the mistake as he prepared his 2025 tax return in November 2026, after the correction window had passed.
James must pay the 6% excise tax for 2025. The tax is calculated on Form 5329, Part IV.
To stop the 6% excise tax from applying in future years, James must correct the excess contribution using one of the following methods:
- Apply the excess to a future year. If James is eligible to make a Roth IRA contribution for 2026, he can apply the 2025 excess contribution toward his 2026 contribution limit. This reduces the amount he can otherwise contribute for 2026.
- Withdraw the excess contribution. If James isn’t eligible to make a Roth IRA contribution for 2026, he can withdraw the 2025 excess contribution instead. Because the correction deadline has passed, he generally can’t withdraw the earnings related to that excess contribution—so he can only withdraw the original excess contribution amount. This withdrawal is treated as a regular distribution, and any earnings from the excess contribution stay in the Roth IRA.
How to report an excess Roth IRA contribution in FreeTaxUSA
STEP 1: Report your Roth IRA contributions
You’ll report the Roth IRA contributions by following menu path: Deductions/Credits > Common Deductions/Credits > IRA Contributions.
Enter the total Roth IRA contributions made for the current tax year:
Based on the income and filing status information you’ve already entered, FreeTaxUSA will calculate whether you have excess Roth IRA contributions. Answer No when asked if you withdrew any Roth IRA contributions. This calculates the 6% excise tax on the excess contributions this year.
FreeTaxUSA will generate Form 5329 to report the 6% excise tax and include it with your federal tax return:
When you withdraw the excess contribution after the correction window, you report the withdrawal on the following year’s tax return. In FreeTaxUSA, when you come to the IRA Contributions screens, you’ll be asked whether you had any excess IRA contributions in the prior year.
If you answer Yes to both questions, you’ll be able to report the removal of the excess amount on the next screen so you don’t continue paying the 6% tax going forward.
STEP 2: Report your Roth IRA distribution
When you withdraw excess contributions after the correction window, the distribution is treated as income for the year the withdrawal takes place. You’ll generally receive Form 1099-R early the following year, before filing that year’s tax return. For example, if you withdraw a 2025 excess contribution in November 2026 (after the October 15, 2026 correction deadline), you’ll generally receive a 2026 Form 1099-R in early 2027 and report the distribution on your 2026 tax return. To enter Form 1099-R, follow menu path: Income > Common Income > Retirement Income (1099-R).
Conclusion
Withdrawing an excess Roth IRA contribution after the correction window can stop the 6% excise tax from continuing in future years, but it doesn’t remove the tax that already applied while the excess remained in the account.
You’ll generally report the excess contribution on Form 5329 for the year it applied, then report the later withdrawal when you receive Form 1099-R. Keeping clear records of the withdrawal request, the account administrator’s confirmation, and any Form 1099-R can help support how and when you reported the correction.