It depends. Instead of entering this directly on form 8880, enter in the following manner instead. Too many mistakes can occur if you enter directly in the forms. Let me guide you the proper way of entering.
- If you are working in Desktop, go to federal taxes>deductions and credits>retirement and credits>traditional and IRA contributions.
- As you navigate through the screens, enter $6000 as the contribution.
- After this is done, go to the retirement savings credit underneath the traditional and IRA contributions.
- Navigate through the questions. Do not enter the contribution made because you have already reported it.
- When you get to the screen that is entitled Credit for Retirement Saving Contribution, enter the $1500 as a 2021 qualified distribution.
- When done, your 8880 will have the full $6000 amount in line 1 and $1500 in line 4.
- Caution, if you received a 1099R for the $1500 distribution, you may be subject to an early withdrawal penalty if taken out before 59 1/2. Also if you did not have your Roth opened for the five-year holding period, you may be taxed on the earnings.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
