You'll need to sign in or create an account to connect with an expert.
Correct. Because RMDs were waived for 2020, none of this distribution was RMD even though that was the original intent of the distribution.
For tax year 2020, I made a withdrawal from an IRA when an RMD was not required. Is there an advantage to call the withdrawal an RMD or a simple withdrawal? Is there a difference in taxes to be paid for an RMD versus a "normal" withdrawal?
In normal years the answer is yes. An RMD not taken, results in a substantial tax penalty (50% of RMD). You would not want to indicate a normal withdrawal before taking the RMD. However, this year the penalty for not taking an RMD has been waived. So your withdrawal is normal with no penalties.
Nothing you your tax return distinguishes a distribution that you received as a required distribution from any other regular distribution. The tax treatment is the same. The difference is that a required distribution is not eligible for rollover; TurboTax asks how much is RMD only to determine how much is eligible for rollover.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
bhoward1963
Level 2
poncho_mike
Level 4
kmcderm3399
New Member
careywcate
New Member
stafford2019
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.