1099-Q box 6 question is worded very confusing

[gjoly]

the step-by-step form for the 1099-Q brings you to Box 6. The question is worded twice. Once where you would answer Yes. And once where you would answer No.

=======================
Box 6: Is the recipient of the distribution the designated beneficiary?
Recipient is not designated beneficiary
Yes

No

=======================

If I focus on the first question, the answer is Yes. But choosing Yes, results in Box 6 in form 1099-Q being checked which is the wrong result.
If I focus on the second statement, the answer is No (this is a double negative and is a very poor way to phrase a question/statement). However, if I do answer No, then the Box 6 in form 1099-Q is not checked, which is the correct result.

Turbotax team--Please fix this so the language is not confusing. 

Finally, please fix the QTP to Roth IRA box so that it properly works soon.

Thanks!

[JFW3]

100% agree.  I have the same questions.  A QTP-to-Roth transfer shouldn't increase your taxable earnings, but TT may not want to assume that, since there are likely situations where a QTP-to-Roth transfer doesn't qualify under the rules.  For example, if you transfer more than $35,000 over a lifetime.  They may tell us not to input the 1099-Q, which was the answer last year.  Box 6 is terribly worded.  They need to follow the 1099-Q -- but wonder how the answer is programmed into TT.

[DaveF1006]

 Here are some suggestions to consider with the entry of the 1099 R.

1.  You want Box 6 on the generated form to be unchecked (assuming the recipient is the beneficiary). 
2. Even though the first question asks if the recipient is the beneficiary, the software is actually looking for the trigger for the Form 1099-Q instruction for Box 6, which says: "Check if the recipient is NOT the designated beneficiary." * Action: Answer "No" to the prompt. This signals the software not to check the "Not the beneficiary" box.
3.  If the 1099-Q was issued in your child's name (the student) and they used it for qualified expenses,  don't enter the   1099-Q at all. IRS Publication 970 explicitly states that if the distribution is non-taxable (used for qualified expenses), it does not need to be reported on the return. This avoids ‌the software confusion entirely.

The 529-to-Roth rollover is a relatively new provision and here some recommended steps for that.

1. The IRS Stance: According to IRS Publication 970, qualified rollovers are not reported on your tax return. They are non-taxable events. 
2. The Problem: If you enter the 1099-Q for the rollover, TurboTax currently tries to tax it because it doesn't have a "This was a Roth rollover" checkbox yet.
3. The Current Workaround: 1. Do not enter the 1099-Q for the rollover portion into TurboTax. 2. Keep the 1099-Q and your proof of the "trustee-to-trustee" transfer in your records. 3. If the beneficiary makes money and you want to track it, you can add it to the Roth contribution in the Deductions & Credits section. Make sure the total (rollover + any other contributions) is not more than the annual limit ($7,000 for 2025).

[user17712776278]

Agreed that TurboTax is very confusing on this aspect.

It would be much better for Turbo Tax to just ask "Is box 6 of the 1099-Q checked?"

[JFW3]

Yes!!  Not to mention a whole lot simpler in wording and straightforward.  

[gjoly]

this worked last year but they changed the form just a bit by adding the extra box but the rollover from 529 to Roth has been there for a couple of years now. So what I am rather disappointed by is that this is taking Intuit/TurboTax so long to fix and update in the program.  This should be a continuation of the same logic as before. If they want to add a few other questions, then that should be something that should have been completed by now.

Intuit: When will you have the 1099-Q correctly updated so that a rollover from a 529 to a Roth will be understood by the program and it is not to be considered taxable income?