At a glance
- The penalty-free correction window for 2025 contributions closed Oct. 15, 2026.
- After the deadline, only the excess must be withdrawn; the net income attributable to the contribution can stay in the traditional or Roth IRA.
- A 41-year-old in the article's example contributed $7,000 to a traditional IRA for 2025 without earned income; removing the excess by Dec. 31, 2026 limits the 6% penalty to 2025 and avoids a second year's penalty.
Clients who missed the Oct. 15 deadline for correcting a 2025 excess IRA contribution can still withdraw the excess or carry it into a future year, according to Ed Slott's IRAHelp.
The penalty-free correction window for 2025 contributions closed Oct. 15, 2026.
After the deadline, only the excess must be withdrawn; the net income attributable to the contribution can stay in the traditional or Roth IRA. The excess carries a 6% penalty for each year it remains, paid on Form 5329.
A 41-year-old in the article's example contributed $7,000 to a traditional IRA for 2025 without earned income; removing the excess by Dec. 31, 2026 limits the 6% penalty to 2025 and avoids a second year's penalty.
For advisors, carrying the excess forward only works for a client who expects earned income in a later year. The 6% charge follows the overage each year until it is used up. The six-year statute of limitations bounds how long an uncorrected excess can accrue penalties.
Only withdrawing by Dec. 31 keeps the 6% penalty to one year
Two ways to fix a 2025 excess IRA contribution after the Oct. 15, 2026 correction deadline
Withdraw the excess
$7,000
- Required
- Withdrawal of excess only
- Net income (NIA)
- Can remain in the IRA
- 6% penalty years
- 2025 only, if done by Dec. 31, 2026
- Form 5329
- Must be filed
Carry it forward
6% a year
- Required
- Eligibility in a later year
- Net income (NIA)
- No withdrawal needed
- 6% penalty years
- Each year until used up
- Time limit
- Six-year statute
Show as table
| Withdraw the excess | Carry it forward | |
|---|---|---|
| Figure | $7,000 | 6% a year |
| Required | Withdrawal of excess only | Eligibility in a later year |
| Net income (NIA) | Can remain in the IRA | No withdrawal needed |
| 6% penalty years | 2025 only, if done by Dec. 31, 2026 | Each year until used up |
| Form 5329 | Must be filed | |
| Time limit | Six-year statute |
Reported by The Advisor's Note desk from Ed Slott — IRAHelp. Published . Corrections