Forgot to include 1099-R (Code G direct rollover, Taxable amount $0.00) in the returns. Do I have to amend the returns? If yes, should I amend the State returns as well?

Amend the Federal return and then the states start with the federal AGI which will not change, so no need to Amend the state returns.

The Amended return process in TurboTax is expected to be ready on March 7th.

Thank you! I have some follow up questions:
(1) Can I start the amendment immediately when it is available on TurboTax or should I wait till the refund is done?
(2) Is there a separate fee for amending the return on TurboTax?
(3) While preparing the return for this year, I was asked a question whether I would want to Amend last years return. Can I amend this years return along with next year filing? Is it recommended?

1)  need to wait until March 7th or you get refund whichever is later.

2) No additional fee

3) This 1099R would Amend the 2018 return.

4) When you Amend this return you will then use the Amended return as starting point next year, but if you are asking about 2017, not sure why you would Amend that return as this issue has no impact on it.

I am sorry if I was not clear. Is there an option to amend the 2018 return along with 2019 return next year; if yes, is that recommended in my scenario. Or better go ahead and do it now itself.

My mis-understanding.  The online each year is only for the current year being worked on.  So it is much easier to Amend now (or within next few weeks) otherwise you actually have to download software to computer to do it (which is still free).

Thanks for all your answers! I appreciate it a ton! 🙂

Update:

I received both my Federal and State refunds and it has been more than a week now. But for some reason TurboTax is still showing the status as 'Accepted' without any signs of me getting the refund. But anyways, as suggested above, I started the process to amend but then TurboTax is showing a message "If you put money into a retirement account, such as a 401(k), without taking any money out, you don't need to go through this area." (Screenshot attached to the original post) Thoroughly confused!

Questions:
1. This message is contradicting with the suggestions above. I also found some other responses in the same tone (<a rel="nofollow" target="_blank" href="https://is.gd/Yv0l6k">https://is.gd/Yv0l6k</a>, <a rel="nofollow" target="_blank" href="https://is.gd/orUIGy">https://is.gd/orUIGy</a>) of the message. So, if you are my tax guy, what will you ask me to do? To amend or to wait (till IRS sends something). 🙂
2. If the answer above is to file the amendment, when? Do I have to further wait till the TurboTax status changes to something else? When I start the amendment process now, it is resetting the return to zero, which is not correct since I already got the refund. Basically, I don't want the TurboTax tax records to be modified under the assumption that I didn't get the refund.

Thanks for your help!

I would Amend and while the tax will be zero, if IRS does send a letter it might be a year from now.  While you can do it in about 5 minutes now and be done with it.

Turbo Tax will always say Accepted.  Then they are done with their part.  The IRS doesn't update or tell Turbo Tax when they approve or send your refund.  

Thanks! I completed the amendment and saved the PDF but two unexpected things happen:
1. Unlike you said, TurboTax printout amended returns for both the states too, not just the federal. Now should I amend States too?
2. Do I have to send just 1040X and 1040 only or the whole set of documents (Schedule 1, 3, B, D), Form 8949 (Some 85 pages).

It should be the 1040X with a corrected 1040 (and accompanying tax forms) attached, and if 85 pages if needed.  No worksheets.  

Hello,

Does this advice still apply to 2022 returns? I just realized I’d forgotten to include my 1099R (Distribution G, $0 Taxable). My return was just accepted today by both federal and state. Am I to wait for receipt of the refund before filing the amendment?

Thanks,

Shenell B

Yes, you should always wait to have the IRS completely process your return before filing an amendment.  They may fix your error for you so that you have no need to file the amendment.

@ShenellB 

Hello @RobertB4444 

Sorry If I piggyback ride on this post but I have a similar situation (Forgot to include 1099R in my 2022 return, with distribution G, $0 taxable as I rolled everything over).  I filed my returns in February. Is there a way to know if the IRS already fixed the error for me so I don't need to file the amendment? I live abroad now and if I can avoid having to do that, it would be great. 

Thanks!

Setup an account with irs.gov to access tax transcripts. They may provide more information. Look for account transcript.

You have 2 options ... mail in an amended return now to explain the missing entry  or wait 2-3 years to respond to an IRS CP2000 notice when it comes in the mail... your choice.  

Thank you for the answer. When the IRS will send me a CP 2000, would I only need to accept their change or will there be a penalty to pay (even if there are no changes in tax liability)? Amending my return would require to have to re-do my 2022 taxes just to add 1099R? (Thanks again! 

if there is no change in your tax liability there should be no penalties or interest. However, if your liability increases the penalties and interest increase each month. so waiting for the CP 2000 if it takes 2 years would cost you in penalties and interest about 30% of the additional tax 3 years about 40%. The %s are not exact and may be high because the interest rate changes. The penalty for late payment is .5% per month since 4/15/2023 (unless you're in California) interest is currently about 8% per year (about 0.022% per day compounded daily). if you are penalized you may be able to request abatement of penalties. Interest can not be abated. 

Thanks @Mike9241 

Since my transfer was not taxable as it was a tax free trustee to trustee, qualified transfer, doesn't that mean that there should be no changes in my tax liability or in order to be sure I have to re-do my 2022 tax return and include that form?

If there is any risk that my liability increase, then I would definitely try to to amend the return even if being abroad it is quite complicated...

Thanks again!

There will be no penalties or interest for this situation however you can choose to amend now and get ahead of the IRS notice  or wait for it to come in the mail and address it then to refute the taxes/penalties/interest that will be on that notice.  You will have to address it eventually so choose when/how you will handle this return error. Personally I would do it now so it is not hanging over your head for that IRS notice to come. 

@Carlottad if box 7 of the 1099-R contains code G or H (code H is for Roth to Roth direct rollovers)  that tells the IRS it's a direct rollover. by their nature direct rollovers are not taxable and the IRS should know this. you might not even get a notice. so there is no need to worry about taxes, penalties or interest and I would not file an amended return. should you get a notice, respond timely that this was a non-taxable direct rollover from trustee to trustee  from type of account the money came from to type of a/c the money was transferred to. include copy of 1099-R  

Code G/H would not be used if this was a transfer from a taxable a/c to a ROTH a/c and would be taxable or vice versa. which may or may not be taxable depending if the Roth a/c was opened 5 years ago. 

Thanks @Mike9241 

This is what I thought and also what my financial advisor said (and what I think the IRS website says as well). Thanks for your help!