Entered Roth distribution and code Q. Turbo tax calculated as earned income and increased amount of tax due based on the entry. Is Something is wrong with the software?
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Entered Roth distribution and code Q. Turbo tax calculated as earned income and increased amount of tax due based on the entry. Is Something is wrong with the software?

I simply believe the software is improperly computing a federal tax for Roth distribution.

3 Replies
Level 11

Entered Roth distribution and code Q. Turbo tax calculated as earned income and increased amount of tax due based on the entry. Is Something is wrong with the software?

Code Q on your 1099-R does indicate a Qualified Distribution from your Roth IRA.  

You can go to Tax Tools > Tools on the left-hand dark menu.  On the Tools Center pop-up, click View Tax Summary.

Back at the left-side menu, select 'Preview my 1040' and scroll down to  Lines 15(a) and (b) to see if the Roth distribution is shown as taxable income.

If it is, you should back and carefully check the interview for your initial 1099-R entry.   You can Search and Jump To to get there. There are some additional questions associated with this type of distribution.  

 Be sure to go all the way through the section until you reach the Summary page.

Additional Info:

https://ttlc.intuit.com/replies/3301082

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Level 15

Entered Roth distribution and code Q. Turbo tax calculated as earned income and increased amount of tax due based on the entry. Is Something is wrong with the software?

The only circumstances where TurboTax will treat a code Q Form 1099-R as taxable is if you select code Q in both of TurboTax's box 7 drop-down boxes.  Make sure that you have selected code Q in only one of the box 7 drop-down boxes and that you have left the other one set to (No entry).  The TurboTax product-quality folks have deemed that TurboTax treating the entering code Q in both boxes as taxable to be a user entry error, not a program flaw or not something that warrants checking in Smart Check or final review.

(Of course you should be entering code Q only if the code on the Form 1099-R provided by the payer is Q.)
Level 15

Entered Roth distribution and code Q. Turbo tax calculated as earned income and increased amount of tax due based on the entry. Is Something is wrong with the software?

If you cannot get TurboTax to treat the code Q Form 1099-R as nontaxable, delete and reenter the Form 1099-R.
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