I am a returning user of TurboTax (used it for many years but had a CPA do it for the last 15 or so) and am using the desktop version. As in past years, in 2020 I rolled over a portion of my traditional IRA to a Roth.
In the TurboTax interview screen "Rollover of 401(k) to Roth 401(k)" I checked the box:
"Yes, this money rolled over to a designated Roth 401(k) or 403(b) account."
I spoke with TT support and reviewed IRS instructions on this. While the rollover SHOULD count toward my taxable AGI, it SHOULD BE DEDUCTED when calculating the MAGI for purposes of determining the Roth contribution limit.
The federal program is NOT recognizing that direct rollover. As a result it is getting several things wrong.
1. It is telling me that my wife and I both have an excess contribution to our 2020 Roth.
2. It is charging me several hundred dollars for those excess contributions.
3. Initially, the state return DID recognize the direct rollover and at first posted an error statement that the federal and state info do not match. However- I no longer see that error- perhaps I checked something that eliminated that mismatch error ... but the federal program still says we have excess contributions and is both restricting what it says we can donate and charging us tax for the supposed excess contributions.
FYI- My case was referred up the chain but no one from TT has contacted me. Hoping you all could help.
