Thank You for opening an official case! I agree 100% - customer support cases should not be "closed" until the problem is resolved with comments for the reporter by the person closing the case. This is very misleading and dubious of any modern enterprise customer support and service request system closing customer facing cases unless customer support is using one ticket system and development is using another. :( That does not play well for customers and should be avoided b/c now the customer support teams have zero visibility into any repair action on the customer's problems and there's no way a customer will be able to see that 2nd ticket. That sure sounds like what was explained on your call. :( It means "Our staff is not working on your issue...for whatever reason is stated in the ticket and when there's nothing...anyone in customer service knows that's the quickest way to anger valuable, paying customers!"
Sorry to digress. I thought I'd explain what MIGHT be happening but we (customers) really do not know.
Now back to this issue. After diving further, it is clear to me the 2020 IRA worksheet is treating an "Inherited IRA RMD from a non-spouse" which has mandatory RMD incorrectly. The rules changed on this a year or so ago which complicates matters too. Some things are grandfathered in. Couple this with when the recipient also has earned income and is also making non-deductible contributions to a "Traditional IRA" and we have a math mess.
My gut says something on our IRA worksheets is very confused. That new 2020 question about the "Total 12/31/20 value of all your "Traditional IRAs" is another clue that this issue is linked into the rules about converting "Traditional IRAs" to Roth IRAs too. The math (as I already posted) does not add up. The result as of today's "fixed TT updates" is the IRA worksheet lowers the "taxable" amount of the "Inherited IRA" RMDs. These are marked as clearly taxable per the 1099-R forms. There's a huge disconnect here. Failure to notice this is going to result in some really bad math and large underpayments of taxes due for anyone not checking TT math.
To temporarily work-around, I needed to "override" values in the IRA worksheet per below. These are probably going to flag any return and may also prevent returns from being electronically filed until this error is fixed by TT. All the internal checkpoints must add up. These flagged forms are usually marked with a red "!" if you start overriding the wrong fields and those are errors.
Anyone who's in this situation needs to verify all the math to avoid underpayment. Of course your situation may be different - YMMV. None of this posting should be considered tax advice. We are only trying to help TT support ID and fix this issue for everyone. TT support, this, plus the other posts should be the roadmap for where to look:
- Part I Line 3 "Basis Carryover as of 12/31/2020" for anyone with an "Inherited RMD"
- TT is messing up that carryover value for the "Traditional IRA basis" which is carried forward every year + the current year's contributions.
- Verify that each 1099-R has the correct check boxes for the inherited state on each form for each person
- Override Part IV, Line 18 with 0 as other posters have noted.
After the above items are fixed, TT makes my "Inherited RMD" fully taxable. Thanks!
