DanaB27
Employee Tax Expert

Retirement tax questions

A 2021 Form1099-R with code R -Recharacterized IRA contribution made for 2020 belongs on the 2020 return. But a 1099-R with code R will do nothing to your return. You can only report it as mentioned below. Therefore, you can ignore the 1099-R. The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a must be zero.

 

 

To verify, did you make a Roth contribution for 2020 that you recharacterized in 2021 to a traditional IRA? If yes you will enter the 

 recharacterization when you enter the contribution to the Roth IRA:

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “IRA contributions”
  3. Click on “Jump to IRA contributions"
  4. Select “Roth IRA
  5. Answer “No” to “Is This a Repayment of a Retirement Distribution
  6. Enter the Roth contribution amount 
  7. Answer “Yes” to the recharacterized question on the “Did You Change Your Mind?” screen and enter the contribution amount (no earnings or losses)
  8. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.
  9. On the screen "Choose Not to Deduct IRA Contributions" answer "Yes" (if you are thinking about doing a backdoor Roth. If you have a retirement plan at work and are over the income limit it will be nondeductible automatically and you only get a warning and then a screen saying $0 is deductible)

 

 

Do you have a second Form 1099-R for the conversion?

 

Or did you accidentally request a recharacterization of your traditional IRA contribution to Roth IRA contribution instead of a conversion? 

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