I took a 2020 partial distribution of RMD from a beneficiary IRA in early 2020 but returned it to the same account before the deadline to do so without penalty under the CARES Act. On Form 1040, I treated this as a rollover with none of the distribution taxable.
The CARES Act, removed the requirement to take an RMD in 2020 so there should be no penalty for not taking this distribution.
However, when I look at the Forms view in TurboTax it shows Form 5329-T with a single entry in the "Waiver of Tax Smart Worksheet," showing "The amount of require distributions that was due to reasonable error upon which you request a waiver of tax."
It shows an amount for that entry highlighted in red as an error that has to be fixed.
There are no other entries on that form or the worksheets with the form.
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My questions:
1. Do I need to request a waiver even though the CARES Act didn't require an RMD for 2020?
2. If so, what do I say, and what do I do with this form and this error to properly complete it.
3. I'm thinking that if I change that amount to zero, maybe the form will go away. But I don't want to do that if this form is supposed to be filed.
So what do I do to get the proper reporting for this situation?
Thanks!
Here's a screenshot of what TT is saying when it wants me to correct the error when I "Review" the federal taxes.
