I think this is another related problem they need to fix. The program is applying the rules for distributions of over 100K from REGULAR IRA’S to Roth IRA’s. Line 15a is in the section for TRADITIONAL IRAS on the 8606.
INSTRUCTIONS FOR FORM 8606, Line 15a
“If all your distributions are qualified disaster distributions, enter the amount from line 15a on line 15b. If you have distributions unrelated to qualified disasters, as well as qualified disaster distributions, you will need to multiply the amount on line 15a by a fraction. The numerator of the fraction is your total qualified disaster distributions and the denominator is the amount from Form 8606, line 7.”
LIne 7 on the 8606 is for distributions from Traditional IRA’s, not Roth’s
For example, you could be withdrawing 120K from your Roth, 20K was a return of original contributions in January and 100K was after COVID hit. the program is saying only 100/120=83% of the total distribution can qualify as a COVID distribution and the rest is a taxable distribution. When in actuality, 100K qualifies and the 20K isn’t taxable at all (assuming your Roth has been open for 5 years.)
