Retirement tax questions

To correct the tax liability, you will need to complete specific "Inherited" and "Roth" sections to show that the distribution is non-taxable.

First,

1. Review your Form 1099-R from Charles Schwab, checking Box 2a to ensure it is zero
2. Next, check Box 7 for the distribution Code Q or Code T
3. If it is Code Q, TurboTax should automatically know it's tax free
4. If it is Code T, TurboTax will ask you follow-up questions related to the 5-Year Rule before it removes the tax

Next, 

1. Return to your 1099-R entry by clicking Review to the right of IRA, 401(k), Pension Plan Withdrawals (1099-R) in the Federal Wages & Income
2. Click on the pencil to the right of the 1099-R
3. Click Continue through the entries you've made
4. Ensure you selected, I inherited this IRA, and that you have identified it as a Roth IRA, then Continue
5. Ensure you answer Yes when asked if the Roth IRA was opened before 2021, Continue
6. Next, "Let's get more information about your RMD", enter the distribution amount pertaining to the RMD, Continue
7. Next, select, Some of the distribution applied to the December 31, 2025 RMD (and enter the RMD amount), Continue
8. Next, in the Review your 1099-R summary, Continue (not the pencil)
9. Continue answering the questions
10. Next, when you see "Let's go over any required minimum distributions (RMD), select Continue (not the pencil)