How to do a CARES Act RMD waiver: simply return the RMD(s) to issuing account(s), then file amended return w/o the income? Does issuing bank file amended 1099?

[DawnC]

Since RMDs were waived for 2020, no part of the distribution was actually an RMD even though it was taken with the intention of satisfying an RMD.  In TurboTax, indicate that the distribution was not an RMD.  Indicate that you moved the money to another retirement account (or returned it to the same account), then indicate how much of the distribution you returned to the IRA.  TurboTax will include the entire gross amount on Form 1040 line 4a but exclude the amount rolled over from the amount on line 4b.  TurboTax will also include the word ROLLOVER next to the line.

If you took a distribution from a retirement account due to corona virus related issues, you will be able to waive the penalty and spread the ordinary tax over tax years 2020-2022.  However, the forms have not been finalized by the IRS yet, so TurboTax has not been updated.  Once the forms are final (no date determined by IRS yet), you will see the options to apply the tax relief provisions on Form 8915-E.   The IRS does not start accepting returns until Feb 12th, so check back then to see what the status is.  

Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.  You qualify if:

• You, your spouse, or your dependent are diagnosed with COVID-19
• You experience adverse financial consequences because of being quarantined, furloughed, or laid off
• You had work hours reduced to COVID-19
• You’re unable to work due to childcare closure or hour reduction

The distribution would be taxed over 2020, 2021, and 2022. You’ll have that time to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions, and if you pay back the amount within that time, you’ll be able to claim a refund on those taxes.

As things change, TurboTax is continually updated and able to handle every situation that arises to ensure your taxes are done right, so you’ll receive your maximum refund.  @cfuller603

[fuadada]

2020-RMD based on 2019-Dec,  which is waived per CARES Act, we are in 2021 and filing Income tax for 2020 - Turbotax has not included any requirements for 2020-RMD waiver for IRA/401K  (rollover or not required)

Would please provide information where it is included in Turbotax-2020 deluxe software or update is necessary? 

[rjs]

@fuadada  You don't need anything special in TurboTax for the waiver of 2020 RMDs. Everything that's needed is already there. If you didn't take a distribution, you don't have to enter anything about your RMD in TurboTax. If you did take a distribution, and then rolled it back into the plan, @macuser_22  told you how to handle it in his response to your other post. You enter the 1099-R, say that none of it was an RMD, and then enter the rollover information.

[cfuller603]

I found the Turbo Tax instructions and the answers in this message chain confusing for my situation.  I took  and kept part of my RMDs before stopping the distribution and did not/not return them for a rollover.  It kept looking like I was supposed to say they were not/not RMDs.   The answer I finally figured out was:  if you kept the RMDs, they are taxable in 2020 and you must answer yes to the RMD question.

  There is no waiver of the tax.  

[macuser_22]

That is correct.  You must say that it was not a RMD.  RMD's are not eligible for rollover and there was no 2020  RMD for certain retirement accounts.

[centemi]

When I entered my 1099-R (for the RMD I took and then returned in 2020) into TurboTax, and marked my distribution as "not an RMD", I was not asked whether I did a rollover, and my distribution is still being counted as taxable. I deleted the 1099-R document and added it again, just in case i had done something wrong the first time, but the result was the same. Please help. Thanks.

[centemi]

But, TurboTax does not ask me whether a rollover occured. Why?

[VolvoGirl]

 If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 form line 4 or 5 and make sure it's right. For 1099R check 1040 for any taxable amount.  If it was a rollover it should say ROLLOVER by the "b" line. 

[centemi]

Please explain where/how to enter the rollover information. I am not asked by the program to do this. Thank you!

[VolvoGirl]

Delete the 1099R and re enter it.

Since there is no RMD required for 2020,  after you enter the 1099R say it was NOT an RMD and then that you rolled it over (even if back into the same account).  Was any withholding taken out?  If it was then did you replace the withholding with your own money?  Otherwise the withholding will be a taxable distribution itself. You will get credit for the withholding taken out. 

If you already entered the 1099-R as RMD and changing your answer to the RMD question doesn't work then you have to delete and renter the 1099-R form. 

[centemi]

I did delete the 1099-R and reentered it prior to asking for help on this forum; but, was never asked whether the distribution was rolled over. This is from an inherited IRA, and Box 7 has in it code 4, which is "death". Is this causing the problem?

[DawnC]

In some, but not all, versions of TurboTax, TurboTax won't ask the question if you indicate that it was an inherited IRA.  Instead, when TurboTax asks, indicate that it was not an inherited IRA. 

That appears to be an issue in the online version only.   The desktop version works fine for an inherited IRA.     Saying it is not inherited is fine since nothing about that goes on a tax return at all. @centemi

[centemi]

Thank you! That worked! But, whar an irksome bug! I hope TurboTax is doing something about this. I spent 3 days until I found you @DawnC !

[MrPeteH]

I just did this. I said it is 100% rolled back in.

Good news: it is listed as $0 taxable.

BAD NEWS: Nowhere does it say "ROLLOVER". 

I suspect the calculations went wonky for this inheritance Roth IRA. I've had it several years. Ni issues until now.

[ReneeM7122]

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, waives required minimum distributions during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.  Here's a link to the IRS with more information.

 Here is a link to a thread that discusses ow to enter the information into TurboTax.

@MrPeteH