Yes, if you only had nondeductible contributions to your traditional IRA then only the distribution amount allocated to the earnings will be taxable. The rest will be tax-free because of your basis. Please see the pro-rata rule for additional information.
If you had a balance left in the traditional IRA on December 31, 2022, and had earnings then each distribution will have a taxable and nontaxable part. The rest of your basis will show on line 14 of Form 8606.
Please review these steps to enter your distribution and basis:
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Click "Continue" and enter the information from your 1099-R
- On the "Review your 1099-R info" screen click "Continue"
- Answer "yes" to "Any nondeductible Contributions to your IRA?" since you had any nondeductible contributions in prior years.
- Answer the questions about the basis from line 14 of your last filed Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs.
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