1099-Q box 6 question is worded very confusing

[JFW3]

It is indeed frustrating when TurboTax takes a "lazy" programming alternative for the 529-to-Roth conversion (someday, AI is going to put them out of business).  I did want to mention that it's been my experience that TT treats an IRA contribution when the contributor makes too much money correctly, when input as a backdoor Roth conversion. It goes first into a traditional IRA, WITH A BASIS, because you make too much to take a deduction.  The traditional IRA is then converted to a Roth IRA, and since it has a basis, this conversion is not taxed.  You need to have no other IRAs, or you run into the prorata rule.  You don't get a tax break on the contribution to the traditional IRA, but don't double-up on taxes for the conversion to a Roth account.  There are a couple of posts that provide details on exactly how to get it into TT, so it all works out. 

[RachelW33]

The development team is aware of this experience and is working on a fix. In the meantime, you can sign up here for updates: Why am I unable to enter my 1099-Q Rollover Information?

@user17712776278 

@JFW3 

@gjoly 

[gjoly]

Thanks! Signed up for notifications on updates. Sad that this has still not been addressed with less than one month to file.  My daughter had been hoping to get her taxes filed by the first week in March. This is very disappointing. My financial advisor is pointing me at a service to use for next year. After 30 years of TurboTax, I very well might be saying goodbye.

[gjoly]

It is nearly the end of March.  When will Intuit/TurboTax have the updates that fix the issue with the 4b box being checked? This is preventing filing and it is beyond aggravating. If this were working we could have filed 2 weeks or more ago.

When will this be fixed?!

[gjoly]

Almost a full two months since this first post, an update has been made but there are still issues. The error that was flagged previously in the error check for federal was the QTP to Roth box 4b. Now that error is gone but you have to go into the list of forms and find the 1099-Q worksheet and check the 5a box to verify that your 529 plan and all the rules meets the requirements for the tax free rollover. This should be questions that are asked in the step-by-step.   Once I checked the 5a box in the 1099-Q worksheet, the federal tax was correct as was the state tax. HOWEVER, when I checked the state tax, there was an error in that review for the 1099-Q--no idea what as it was flagging the first name field.

Under 3 weeks to tax filing day to fix something that worked last year just fine.  Intuit--Please get this fixed by next week and please ensure you keep all the test cases and valid answers and scenarios to you can regression test next year's version of TurboTax and fix issues quicker.  And don't use AI to do your programming.

[DaveF1006]

Check these things in your return.

1. Check the 1099-Q Worksheet again: Look at the top of that specific worksheet. Ensure the Recipient’s Name and SSN are appearing correctly. If they are black (instead of blue or green), they might be "hard-coded" and not flowing to the state. 
2. The "Delete and Re-link" Method: Sometimes, the cleanest fix is to delete the 1099-Q entirely from the Federal side and re-enter it.
3. Now that you know the “5a box” is the key, entering it again usually gets the software to match the name and SSN fields to the State return correctly.

Check the State "Information Worksheet": Switch to your State forms and find the "Information Worksheet" (usually the first form in the list). See if your name or your dependent’s name is missing a middle initial or has a trailing space. State systems are notoriously picky about matching the Federal "Header" exactly.

 

Just a friendly reminder (though it sounds like you’re already on top of this): for that rollover to truly be tax-free and satisfy that 5a checkbox, ensure:

1. The 529 plan has been open for at least 15 years.
2. The amount doesn't exceed the $35,000 lifetime limit.
3. The funds being moved wasn't contributed within the last 5 years.

[gjoly]

Thanks for the things to check.
I did #1 and that all was fine.

I deleted ALL the 1099-Q info and started over. When I did this and went through the step-by-step, I noticed a fundamental flaw with the logic. It is assuming that the recipient of the 1099-Q rollover is a student.  Somehow box 6 one the 1099-Q worksheet is getting checked despite answering these questions the very same way I did before. Being a student is not a requirement to be able to do the 529 to Roth rollover. This is the point of allowing the rollover. The recipient of the funds and the 1099-Q is the beneficiary of the 529. the criteria for rolling over is met, no additional money deposited for 5+ years, it has been in place for over 15 years with this same beneficiary. I had to uncheck box 6 and then go down to the rollovers section and check box 5a again.  There was no reason box 6 should have been checked. It wasn't getting checked in prior versions of this year's turbotax.

Some changes have been made but the whole 1099-Q in Turbotax is still significantly messed up and requires manual tweaking.  There are likely logic questions such as "Was the recipient a student during the 2025 tax year?" and then there can be questions about educational expenses. But if they were not a student, those questions are not relevant and the rollover can still take place. 

And box 5a in the rollover section of the worksheet should require a question in the step-by-step, that asks those qualifying questions so if they answer yes to all of them, then 5a is checked automatically.

I should be getting paid for debugging this for Intuit.

[gjoly]

It appears that when going through the 1099-Q form, that the taxes are flagged when I select State from the Private, State or Coverdell options.  This seems to check the box Box 6 in TurboTax despite that box not being checked on the actual 1099-Q form.   If I uncheck box 6 and then check question 5a in the worksheet, then the federal taxes pass the check. This means Intuit seems to think they have things correct on the Federal side--this is not correct and this needs to be fixed.

Not sure on the state side as the taxpayer name is flagged under state as if they have not completed something there. The state follows the federal method so not sure why there is a problem.

Taxes are due is less than two weeks and this is still not fixed.  Disappointing is an understatement.

[MarilynG1]

If your daughter is the Beneficiary of the 529 plan, and the rollover Roth contribution is for her, don't enter the 1099-Q reporting this in your return.  She will get a Form 5498 documenting the rollover for her records.  You would only need to enter it if you have a non-qualifying distribution with taxable earnings.  Here's more info on Form 1099-Q. 

Here's more info from IRS Pub. 970.

@gjoly 

[gjoly]

Thanks for that information and I appreciate your attempt to help. This is on her tax return and while it may not be necessary to enter this information per the IRS documentation, the point is that TurboTax should be handling the step-by-step properly so that I can enter the information which fills out the 1099-Q worksheet based on the answers to questions that go through the scenarios that include this one where the rollover meets all the criteria and should not be taxed or included in the forms filed with the IRS and the state.  And if I manually correct the 1099-Q so it recognized that this distribution is not taxable, the state error check flags the recipient name as an error (despite it being the same and there really is no issue) because they have not fixed the state update for the 1099-Q. 

If we as customers of Intuit have to read every publication to account for the fact that TurboTax is not doing the step-by-step properly, then why are we buying TurboTax in the first place? There was very little change in the rules for the rollover distribution other than a slight change in the boxes on the form. I am trying to understand why this is so screwed up from last year and why it is taking so long to fix.  

[gjoly]

Still not fixed with the latest update on April 3, 2026. Box 6 still does the opposite of what it is supposed to do. There are no questions for section 5 in the 1099-Q worksheet to validate that the rollover meets the rules for a tax free rollover to a Roth.  

This needs to be prioritized. 

AI programmer--please prioritize fixing the step-by-step for 1099-Q including adding questions to validate that the rollover meets the criteria necessary.

Unbelievable!! 😠

[gjoly]

I have not seen an update to TurboTax since April 3, 2025. I am sure there has been some updates. I have stopped Turbotax and restarted it. Nothing. I have run check for updates, says there are none. I am rather sure that the program was updated since then. How do I get the latest updates?

[JFW3]

TurboTax had the same issue for 2024 taxes and chose not to update the programming for 2025 taxes, using the workaround of not entering a 1099-Q into TT when it does not result in federally taxable income.  That means the user needs to know the tax code and not rely on TT's question-and-answer format.  It also creates an issue if state taxes treat a 529-to-Roth rollover differently.   The difficulty is determining who pays the tax on a non-qualified distribution.  It depends on how the check is made out.  But that shouldn't prevent programming. If the user has to determine the criteria, the program can ask the questions to get the correct answer.  I don't expect TT to update their programming for the 2026 tax year.  For whatever reason, TT decided not to update. Once AI gets its bugs worked out and can protect personal information,  I'm thinking it will replace most current tax software anyway.