In January and February of 2020, I was on the tail end of 2 years being unemployed and forced to take two distributions from my Traditional IRA. I also withdrew 10% of the distribution to make a down payment on the expected tax liability and early distribution penalty.
Then in March, two things happened. First, I started a new job, and second, the pandemic hit. As part of the National Emergency declaration (not the first Pandemic relief law), it became possible to return distributions from a Traditional IRA within 60 days of the original tax day (April 15th) by the rescheduled tax day (July 15th). This was done as a 2020 contribution back into the same Traditional IRA. Only the February distribution fell within this time period, so I still have the January distribution subject to tax and penalty (I am not yet 59 1/2).
I have a 1099-R and a Form 5498 for the distribution and the contribution.
The question I have is that when I put the distributions into TurboTax, the software said it would guide me through looking for exceptions that could make it at least partially not taxable or penalized. When prompted, I entered the contribution information.
Later, when exploring personal personal deductions, I was prompted again for IRA contributions and I put in the same information. My assumption is that TurboTax would understand that they were the same contribution as prompted for before. But when I put the number in, my refund grew significantly, making me think TurboTax may have doubled the contribution.
Was my assumption wrong that TurboTax would not have let me enter the same IRA contribution twice, or am I worried about nothing?
Thanks for your help.
