No, it should not count as income.
Go back to the posting of the 1099-R.
Once entered there are a series of questions.
- One is Tell us if you moved the money through a rollover or conversion.
- Select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)
This will take it out of your taxable income.
This is how to post a 1099-R
- Login to your TurboTax Account
- Click "Wages & Income" on the top
- Scroll down to "IRA, 401(k), Pension Plan Withdrawals (1099-R)"
- Answer "Yes" to the question "Did You Have Any of These Types of Income?"
- Click "I'll Type it Myself"
- Choose "Form 1099-R, Withdrawal of Money from 401(k) Retirement Plans, Pensions, IRAs, etc."
- Click "Continue"
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