Get your taxes done using TurboTax
1. I agree that saying no feels odd. If the question read, Did you receive a taxable 1099-Q distribution, you would feel better. Do not enter the 1099-Q if nothing is taxable to the federal.
TurboTax is a do it yourself program with a goal of getting the correct information on your tax forms. According to the IRS:
- “A Roth IRA for the benefit of the same beneficiary, if the distribution is a direct trustee-to-trustee transfer from a QTP account that has been open for more than 15 years and the amount distributed does not exceed total contributions (and attributable earnings) made to the QTP more than 5 years before the distribution date. However, this doesn't apply to the extent the amount distributed when added to other amounts contributed to Roth IRAs exceeds the annual contribution limit. For more information about contributions to Roth IRAs, see Pub. 590-A.”
- “Don't report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040, 1040-SR, or 1040-NR. These aren't taxable distributions.”
2. For CA, the entry asks for the amount excluded from the federal. FTB says: Rollover distribution from an IRC Section 529 plan to a Roth IRA is includible in California taxable income and subject to an additional tax of 2½%.
The earnings are the taxable portion and should be entered. The basis is never taxable to federal. Great job thinking this through!
