Published August 2026
The two timing windows
| Corrected before the filing deadline (incl. extensions) | Corrected after the deadline | |
|---|---|---|
| Excise tax owed | None | 6% of the excess, for every year it remains as of Dec. 31, until removed |
| What must be withdrawn | The excess contribution plus net attributable earnings | Just the excess contribution — earnings can generally stay, but the 6% keeps accruing on the excess until it’s removed |
| Where earnings get taxed | Ordinary income, in the year the excess contribution was made — not the year it’s withdrawn | N/A — earnings aren’t required to move |
| Form required | Generally none, if fully corrected in time | Form 5329, filed annually until the excess is actually removed |
Per IRC §4973 and IRS Form 5329 instructions on additional taxes on qualified plans and IRAs.
How the “net income attributable” calculation works
When you withdraw an excess contribution before the deadline, you also have to remove the earnings that specific excess generated — not just the earnings on your whole account. The IRS uses a set formula (excess contribution × the account’s adjusted gain or loss over the period the excess sat there, divided by the adjusted opening balance) to isolate that amount. In practice, your custodian runs this calculation for you; you don’t need to compute it by hand.
Two other ways to fix it besides withdrawing
An excess contribution (before it’s converted) can still be recharacterized as a Traditional IRA contribution instead of withdrawn, if you’re within the correction deadline. That’s different from undoing a Roth conversion itself — since the 2018 tax law changes, conversions can no longer be recharacterized or reversed once made. Alternatively, an excess contribution can be absorbed into a future year’s contribution limit instead of withdrawn, but that doesn’t erase the 6% excise tax for any year the excess sat in the account before being absorbed.
Frequently Asked Questions
Can I still recharacterize if my backdoor Roth conversion itself was the mistake?
No — since 2018, Roth conversions can no longer be recharacterized or undone. Only excess contributions made before conversion can still be recharacterized.
What if I don’t realize the mistake until years later?
You’ll owe the 6% excise tax on Form 5329 for every year the excess sat in the account, going back to when it happened, until you actually withdraw it.
Does withdrawing the excess also trigger the 10% early withdrawal penalty?
The earnings portion withdrawn along with a timely corrective distribution may be subject to the 10% penalty if you’re under 59½ and no exception applies — the original excess contribution itself is not taxed again, since it was already after-tax money.
I’d be retiring or working less in 5 years, and considering this financial recession, I’m curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $250K per year but nothing to show for it yet.
So you cannot roll over a Fed TSP 401k to a Roth IRA, but you can roll over to a traditional IRA and then to your personal Roth IRA.