It has to do with how you answered the questions after you entered the form. Go back and edit the 1099-R. The distribution should be a mix of basis and earnings.
A qualified ROTH withdrawal has several requirements to be tax free:
- A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.
- It is made after the 5-year period beginning with the first tax year for which a contribution was made to a Roth IRA set up for your benefit.
- The payment or distribution is:
- Made on or after the date you reach age 59½,
- Made because you are disabled (defined earlier),
- Made to a beneficiary or to your estate after your death, or
- One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit).
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