How to i enter the return of a required minimum distribution from an inherited IRA?

Forum|Forum|5 years ago
February 23, 2021
3 replies
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i took the RMD and received form 1099-R. However distribution was returned once the CARES act passed.

TurboTax Premier Online

ColeenD3

Level 15

You will encounter a screen in the 1099-R interview portion that asks what you did with the money. You can indicate that you rolled it over. You must have done it within 60 days.

The CARES Act waived 2020 required minimum distributions out of retirement accounts. Some who took those RMDs were able to roll them back into their IRA or 401(k) under the 60-day rollover rule. The IRS will also allow beneficiaries of inherited IRAs to roll back this year's distribution into the account.

gatorlynch

Level 2

Anybody figure out a solution to this?

With an Inherited IRA, distribution code 4 is checked in box 7.

This seems to not allow the whole tell us what you did with the money option ...

bobweissman

Level 6

@gatorlynch wrote:
Anybody figure out a solution to this?
With an Inherited IRA, distribution code 4 is checked in box 7.
This seems to not allow the whole tell us what you did with the money option ...

Yes, I figured this out today after beating my head against the keyboard for a few hours.

You must go back and tell TT the IRA is not inherited. Inherited IRAs are generally not eligible for rollover. This is a tax year 2020 exception which is not programmed into TT.

jdalabama

Level 2

My turbo tax deluxe does not permit documenting rollover of IRA RMD for 2020. Instructions say just answer questions on what I did with the funds as I enter the original 1099R. But these questions are never presented so that I could answer them

PattiF

Level 15

Please do not enter the returned amount as a contribution under the Deduction and Credit section. Please delete these entries:

Login to your TurboTax Account
Click "Federal" from the left side of your screen
Click on “Deduction and Credits” tab on top
Click "edit" next to "Traditional and Roth IRA Contributions"
Remove the checkmark next to "Traditional IRA"
Select "yes" to "Remove Traditional IRA Contributions?"

Please follow these steps to enter your 1099-R and the return of RMD:

Login to your TurboTax Account
Click on the Search box on the top and type “1099-R”
Click on “Jump to 1099-R”
Continue until "How much was a RMD?" and select "none"
Continue "Tell us if you moved the money through a rollover or conversion" and select "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)"
Continue answering the questions.

RMDs were waived for 2020 and you must indicate to TurboTax that none of the distribution was RMD. If you already enter the 1099-R as RMD then you must delete and reenter the 1099-R form. Only editing the 1099-R form and changing your answer to the RMD question will not work.

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jdalabama

Level 2

My problem is after entering the 1099R info it never gets to "Tell us if you moved the money through a rollover or conversion" and select "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)"

Instead it asks if this is an inherited IRA RMD, which it is, then launches into several questions about previous owner and never asks what I did with the funds

survivor77

Level 2

Wow, I hope this still works. Here we are in 2023 and I am having the same issues with TT wanting me to pay the required minimum distribution on my dead parents' lump sum pension payments with no errors found(!) I think part of the problem is the breadth of possibilities being crammed into the 1099R category though...

survivor77

Level 2

Nope, doesn't seem to work anymore. These are either regular plans or represent the entire payout, btw... I can't imagine all four issuers of 1099Rs are incorrect and TT is second guessing everyone by having me pay an additional $2500 as being right. Seems like a glitch to me.