How can I correct an excess Roth IRA contribution?

The best way to correct an excess Roth IRA contribution depends on the specific situation, but there are three main ways to do it:You can remove the excess contribution and any earnings attributed to it by the tax deadline. This is the most complex way, but it avoids penalties.You can remove the excess contribution after the tax year is over, and you'll pay a 6% excise tax (based on the excess contribution) for each year that has passed. But in this case, you won't have to do any earnings calculations.If your excess contribution was due to your income being too high to contribute to a Roth IRA, you may be able to recharacterize the excess Roth contribution as a traditional IRA contribution.

How does the IRA know if you overcontribute to an IRA?

Your broker reports your retirement account contributions to the IRS at the end of each tax year, using IRS Form 5498, IRA Contribution Information.

How long do I have to remove my excess Roth IRA contributions?

You can remove your Roth IRA contributions at any time, but they must be removed by the tax deadline for the year of the contribution in order to avoid penalties. The excess Roth IRA contribution penalty is a 6% excise tax on the additional amount per year.

Can I recharacterize excess Roth IRA contributions?

If you haven't exceeded your annual contribution limit for a traditional IRA, it may be possible to recharacterize an excess Roth IRA contribution as a traditional IRA contribution. This generally occurs if the reason for the excess Roth contribution is because your income was too high to qualify for a full Roth contribution, and while there are income limitations in some cases for the traditional IRA deduction, the ability to contribute isn't income-dependent.

Roth IRA Excess Contribution

Here's how to undo a Roth contribution.

By Matthew Frankel, CFP – Updated Feb 3, 2026 at 5:38 PM EST | Fact-checked by Parker Hicks

Key Points

Avoid Roth IRA excess contributions by tracking all IRA inputs and knowing income limits.
Excess Roth IRA contributions incur a 6% yearly penalty until properly addressed.
Withdraw excess contributions by tax deadline to avoid penalties and correct filing issues.

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Calculating Net Income

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Your adjusted opening balance (AOB) is your Roth IRA balance before your excess contribution, plus all contributions, including the excess contribution, consolidations, and transfers into the account that you've made since the excess contribution.

Your adjusted closing balance (ACB) is the current value of your Roth IRA, minus any distributions you've taken or any consolidations or transfers you've made since the excess contribution.

Example of calculating the withdrawal

For example, say you accidentally contributed $8,000 to your Roth IRA in 2025, although you were eligible to contribute only $7,000 that year. So your excess contribution is $1,000.

Your AOB was $10,000, and your ACB is $12,000. You'd subtract your AOB ($10,000) from your ACB ($12,000), leaving you with $2,000. Then you'd divide this by your AOB, leaving you with 0.2.

Finally, you'd multiply this by the amount of your excess contribution ($1,000), giving you your net attributable income, $200.

So if you want to avoid the 6% penalty on your excess contribution, you have to remove the $1,000 contribution itself and the $200 you earned because of that contribution.

What if you lost money?

If you go through the preceding calculations and find you've taken a loss instead of earning money on your excess contribution, you subtract this loss from the amount you must withdraw.

For example, if you follow the formula and find out you've lost $200, you only have to withdraw $800 to satisfy the government.

Tax implications

Successfully removing the excess contribution before the tax deadline will help you avoid the 6% excise penalty, but you'll still have to pay income tax on this money. If you're younger than 59 1/2, the government will also charge you a 10% early withdrawal penalty on any earnings you withdraw. So in our example, you'd owe $20 of your $200 in earnings to the government, plus income tax.

If you don't remove your excess contribution before the tax deadline, you can file an amended tax return after you've removed the funds, but you must do this by the October tax extension deadline. The government will review this and refund you any penalties it's taken out if necessary.

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Excess Roth contribution FAQs

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

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