Does Turbo Tax clearly explain how to file Roth IRA distributions?

[Anonymous]

I am having difficulty finding the area in TurboTax to enter the Form 1099R data from two post 59 1/2 Roth IRA distributions. My financial institution has cited the 1099R line 2a total amount of the distributions as taxable while notating on line 2b that Taxable Amount Not Determined.  The Roth IRA was established 20 years ago, but moved to a different financial institution in 2017. My understanding is the 5 year rule does not restart by my move from the original Roth account to a different account. So I am confused about the 1099R designation of the funds on line 2a as taxable.

[dmertz · Accepted solution]

Because you were over age 59½ and the Roth IRA had been at the custodian only since 2017, you should have code T in box 7 of the Form 1099-R.

Enter the code T 2018 Form 1099-R exactly as received under Wages & Income (or Personal Income) -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R).  Click the Continue button on the Your 1099-R Entries page and in the questions that follow indicate that you had a Roth IRA before 2014.  TurboTax will the treat the distribution as nontaxable by including the distribution on Form 1040 line 4a but excluding it from line 4b.  No Form 8606 Part III will be included with your tax return.

Ignore any TurboTax income summary pages, they are more confusing than helpful.  Look at Form 1040 instead.

[Anonymous]

Thank you! Yes, the financial institution did include code T on the 1099-R line 7.