Conundrum with Amending my return

[DigitalWinePress]

I already had both Federal and Michigan returns accepted. I owed tax on each return and those payments have already been electronically debited from my bank. The State payment included a $95 interest & penalty for under withholding (the importance of that will become clear).

I forgot to enter my wife's 1099-R for a direct rollover from a former Employers 401K to an IRA. This is not a taxable event, however I tried to start the process to amend the return but (and here is the problem) the State return keeps indicting I owe that $95 penalty which I already paid with my first e-filed return. 

This is my first Amended return and I would really appreciate some guidance with this situation. Do I even need to Amend the return since the 1099-R has no taxable event? If so, do I need to resubmit both complete Federal & State returns? How do I correct for the erroneous $95 penalty I've already paid?

Thank you.

[KathrynG3 · Accepted solution]

Yes, even though it is not a taxable event, you do need to report your wife's 1099-R. 

It depends. Yes, you need to amend the Federal return. If your state requires you to attach the federal return since the Adjusted Gross Income is not changing.

To correct the erroneous penalty being included that you already paid, follow these steps:

• Cancel your amendment and restart it. Be sure to include in the explanation that it is information only and the balance due with penalties has already been submitted. Click the link for step by step directions on amending 2019.
• From the left menu, select Federal
• Navigate to the third tab from the left, Other Tax Situations
• Scroll down to Additional Tax Payments and click Show more
• Your details could be adjusted in Underpayment Penalties
• Since you are printing and mailing it, you could white out the calculated penalty since including the penalty would result in a penalty overpayment.

Alternatively, if you change from TurboTax Online to the CD/Download, which would be free to you since you already paid for 2019, the Form mode toggle in the blue header will allow you to go directly to Form 1040X. Here are the steps:

• Click on the Forms Icon in the blue menu
• Navigate to Open Forms and click to open the Search,
• Type 1040X, highlight the texxt under 2019 US Form 1040: Individual Income Tax Return and click Open Form
•  Override the penalty amount if one is posted

From the 2019 Form 1040X Instructions, page 9, column 2: 

You are only changing information. If you aren’t changing any dollar amounts you originally reported, but are changing information, do the following.

• Check the box for the calendar year or enter the other calendar or fiscal year you are amending.

• Complete name, current address, and SSN.

• Complete Part I, Exemptions and Dependents, on page 2, if you are changing your exemption, or, for 2018, dependent, information that doesn’t change any dollar amounts.

• Check a box in Part II, if applicable, for the Presidential Election Campaign Fund.

• Complete Part III, Explanation of Changes.