Excess IRA Contributions Have to Be Fixed — Here’s How

It's easiest to remedy before filing your taxes, but you have options after, too. Be sure to take action — there's a 6% penalty every year until it's fixed.
Kevin Voigt
By Kevin Voigt 
Edited by Chris Hutchison
Excess IRA Contributions Have to Be Fixed — Here’s How

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Paid too much into your traditional or Roth individual retirement account? Don't panic — it’s not too late to walk back an excess contribution to your IRA. But it’s less trouble if you do it before the April tax-filing deadline.

The annual limit on contributions to an IRA is $6,500 in 2023 ($7,500 if age 50 and older). In 2022, it was $6,000 (or $7,000 if age 50 or older). It’s important to act if you contribute too much, because you must pay a 6% penalty tax on the excess amount every year it goes uncorrected.

Here’s what you should do, and what you need to know to prevent future excess contributions.

If you've contributed too much to an IRA, fix it before filing taxes

The before-filing timeline is ideal, because it creates significantly less work — and exposes you to fewer potential penalties. If you over contributed for the year and you haven't yet reached the tax-filing deadline:

  1. Contact your plan administrator. You'll need to tell them you made an excess contribution, and ask them for instructions on how to fix it, including the necessary paperwork or online process.

  2. Withdraw the excess contribution and earnings from the IRA. You can generally avoid the 6% penalty by withdrawing the excess amount and attributable earnings or losses by the tax-filing deadline in April.

  3. Pay taxes on any earnings. Any earnings you remove from the IRA are taxed as ordinary income. (Earnings are figured through a formula called "net income attributable," which can be earnings or losses, depending on how the account has performed.) You may have to pay a 10% tax for early withdrawal on any earnings if you are younger than 59½. Consult your plan administrator or tax professional about whether that applies to you.




no account fees to open a Fidelity retail IRA



management fee



Account minimum 


Account minimum 


Account minimum 



Get $100

when you open a new Fidelity retail IRA with $50. A 200% match. Use code FIDELITY100. Limited time offer. Terms apply.



career counseling plus loan discounts with qualifying deposit



no promotion available at this time


Paid non-client promotion

Discovered excess IRA contributions after filing taxes? Do this

You have a few options if you discover an excess contribution after you file your taxes:

  • Contact your plan administrator and file an amended tax return. If you remove the excess contribution and earnings and file an amended return by the October extension deadline, you could avoid the 6% penalty.

  • Carry the excess forward to the new tax year. You’ll pay a 6% penalty while the excess contribution is on the books, but may avoid future penalties.

  • Roth IRA option: Move the excess to a traditional IRA. If you have a Roth IRA, another way to avoid penalties is to transfer the excess amount and any earnings into a traditional IRA. The IRS calls this move a “recharacterization.” Rules state this should be done before tax day, but allows an extension if you filed your taxes on time and take "corrective action" toward the recharacterization within six months of the filing deadline.

Common reasons for excess IRA contributions

To help you avoid this problem in the future, know the main culprits for excess IRA contributions:

  • You’ve exceeded the IRA limit through one or more accounts. The annual limit on IRA contributions is the combined total of traditional and Roth IRAs, not just any one IRA. Pay attention to how much you contribute to each account that counts toward that maximum.

  • You’ve set your automatic investment plan too high. Automatic contributions are a great way to stay on plan; just make sure they don't add up to more than the overall limit.

  • You make too much income for a full Roth IRA allowance. Unlike traditional IRAs, Roth IRAs set income limits as to who qualifies, and contributions are reduced or phased out at higher income levels. Consult our Roth IRA calculator to determine how much you can contribute.

Overcontributions to your IRA are a nuisance, but more of a speed bump than a roadblock on your way toward saving for retirement.

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.