My RMD comes to me in a monthly distribution (i.e., the year's RMD divided by 12) . I received Jan, Feb, and Mar checks, but then I was given the option of waiving the RMD. I decided to stop the payments. Note: What I had received up to that point was not very much and it didn't seem worth all the trouble to do a roll-over to put those 3 months of RMD distributions back into the account. I have received a 1099-R for the 3 months' worth of the RMD.
On the Turbo Tax Deluxe screen that says "Tell us More About This Retirement Plan Distribution", it asks whether I received all of the RMD or not. How should I answer? If I answer "NO", then a screen comes up with the heading "Required Minimum Distribution" and it asks me to fill in the blanks for the RMD amount and the Amount Actually Received. Then the next screen has the heading "Let's see if we can reduce your tax bill" There it says that I owe 50% of the remaining RMD that I did not take unless I explain why there is a difference between the amount of the RMD and what I actually received. Of course, the reason is that I stopped the monthly distributions under the provision of the CARES Act.
Or do I answer that I received all of the RMD? Technically, what I received is not ALL of the RMD, but is ALL that I received before the CARES Act went into effect. If I answer "YES" that I received ALL of the RMD, then TT is satisfied and moves on to the next Income item.
Likewise, if I answer "I was not required to take an RMD", TT is satisfied and moves on the the next Income item.
So, how do I answer the question about whether I took all of the RMD or not on the screen with the heading "Tell us More About This Retirement Plan Distribution"?
a. Yes, all of it or
b. No, not all of it or
c. I was not required to take an RMD for 2020.
