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It seems unlikely due to the fact you are already taking your required minimum distributions (RMDs) which means you would not be able to reduce the amount in 2026, for that income. The only other option, which may not be is to reduce other types of your income if you can. Income Tax on Withdrawals: If you are a New Jersey resident, withdrawals from an inherited traditional IRA are subject to state income tax, even if the decedent lived in another state. If you are unable to reduce your other income sources then it's possible you may end up in a similar situation next year. Once key piece is to be sure you are paying enough tax throughout the year to eliminate interest and penalty. This can be done through withholding or estimated tax payment.

Correct. There is nothing that shows RMD in the 1099. It is why you must report it via TT by answering the question. It is because one may have multiple IRAs, so multiple reporting. But one "total rmd". The main question here was clarifying i.n the question for the first year reporting of RMD.

1a. No.  Your original approach was correct.  You and your wife will both fill out the top half of schedule A exactly as @DaveF1006 says above.  You will enter $25,000 in column (h) which then leaves $25,000 for each of you in column (i).     2. You were also correct that Dave meant column (i) and made a typo.   3. You are also correct that the total gift is represented in column (g).

First off 2023?  The previous to 2025 is 2024. The taxes for 2024 is what the IRS is going to adjust for a SS lump payment in 2025 that part of it was for 2024.   When I right click on the box I see the option to ingore the error but nothing happens.   Why is it telling me something is not right?  What does it know?  I should be able to put in anything.  I hoped TT would have populated the box since it imported the 2024 data.

If you are not seeking the tax credits but rather want to just offset your 529 distributions, then you can add all your 529-eligible expenses (no matter what they are) into the Box 1 number.      As long as your 529 withdrawals don't exceed whatever you put into TurboTax's 1098-T box 1...  then the whole thing doesn't even make it to your tax return.  The worksheet calculates that you have no taxable income from the 529 distribution, and "poof" it's gone.

Yes, TurboTax will walk you through- but you will have to calculate the entries for the Colorado income.  You can use one half multiplied by the percentage of time she was a Colorado resident.  I would suggest keeping a copy of your calculations with your tax records.  @RaiderGatorBuff 

It works as you instructed.  thank you!  But Turbotax should fix this problem and give the option to choose COLLECTIBLE after importing from your broker.  To manually input all these data is very inconvenient and users should be alerted by Turbotax about this problem.  I wasted a whole day trying to figure out how to do this.   However, thanks again for the insight and solution!