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No, I don't recommend skipping it. If your 1099-R shows Code T, it means the bank is letting the IRS know you’re over 59½, but they aren’t sure if your account is at least 5 years old. Here is the best way to correct this.   On the follow-up questions after your 1099-R, look for the question: "Did you have a Roth IRA open before 2020?" (or whatever date is 5 years prior). Select YES.   In many cases, answering "Yes" to the 5-year question and having a Code T/Q will satisfy the software, and it will stop asking for the exact contribution history.    

If this 'exception' was indeed the mistake related to the line# changed in 1009R since 2020,  how come Intuit/ TurboTax team have NOT made code change / Update to CORRECT this ??  Faking it, fill in line16 with number from line 1, could bypassed the check but no one can tell if it will  lead to other unexpected issue or not.    

TurboTax does not automatically populate the list of income items taxed on the federal return that are not taxed on the Alabama return, but you are able to populate this list in Part IV of the form 40 yourself.   In the Alabama interview, proceed to the screen titled "Federal Income Not Taxed by Alabama". At the bottom of this screen, there is a table in which you can enter the description of the income item and the amount. These entries are carried directly to Part IV on the Form 40.   In addition, if any entries are made here, then the YES box on line 5 is checked. 

If you are using desktop software you may need to do a manual update. Try clearing your Cache and Cookies and then try this link instructions.   If you are using the online software, Clear Cache and Cookies. 

Here is how to deem part of your pell grant taxable.   Go to Education: Go to Federal > Deductions & Credits > Education > Expenses and Scholarships (1098-T). In the interview, when you reach a screen labeled Did you have any of these common situations in 2025, check received a scholarship, grant, or other aid Then after you enter your 1098 T and reach a summary screen, press continue. There should be a screen that is labeled if you had any of these situations for your scholarship and grant. Here check you used it for room and board. Now put the amount that you wish to be taxed. This amount will now be placed on Line 8R on Schedule 1 in your return and will appear as schlorship income on that form.

No the amount on line 35a is the amount I was told I was going to be refunded which was the full 2,893, and they didn’t deduct anything last minute according to the 1040. I’ve seen similar ppl have this issue with turbo tax before, was there any solution? Theres a little over $1400 missing. Also I have not received my state yet. Just the federal tax return. 

TurboTax does this calculation behind the scenes and does not provide a way to view the calculation.  For most people MAGI for the purpose of a Roth contribution is AGI minus the amount of any conversions to a Roth IRA.  In less common cases there are a few additions to AGI.  The entire calculation, which TurboTax implements correctly, is described here: https://www.irs.gov/publications/p590a#en_US_2025_publink1000230985   For TurboTax to treat the code-7 distribution as a Roth conversion, you must indicate that you moved the money to another retirement account and that you converted the entire amount to Roth.

So, in the end I think I found my own solution. I read up on how the IRS defines self employment, earned income and scholarship/fellowships and   and based on such, am comfortable in what I intend to to.  I am not sure Turbo Tax is asking the right questions to be honest (though it did in the online version, not software that I could see), because I was able to generate an 8615 worksheet which allows you to enter the child's other earned income, which this stipend clearly was, and then the problem disappears (no longer shows up as unearned income).  This then does not impose the kiddie tax.   In the end, the child still owes less than the parent loses by claiming them (since they CAN b claimed, even if they aren't they don't get the AOC for example) so that's probably the route we will take.    Thanks.    

Thank you for the reply.  My question related to where, exactly, in the Medical Expense section does the prompt pop up for deducting medical insurance premiums.   I found it by trial and error at the end of the medical expense deduction section.    TawasTed