Schwab erroneously issued a check for the 2020 RMD, and they, withheld $533 for federal tax. I spoke with their representative to say I did not request nor want the 2020 RMD due to CARE provisions not requiring the RMD for 2020. They said 'just send us a check for the RMD" I sent them a check for the entire RMD which they deposited back into the account. The check included the amount of the federal tax withheld. TurboTax is not letting me submit my return because the gross distribution (which I have left at $0) is smaller than the tax with held. How do I move forward?
Enter the 1099R exactly as shown including box 1 gross distribution. Since there is no RMD required for 2020, after you enter the 1099R say it was NOT an RMD and then that you rolled it over (even if back into the same account).
more complete answer.....
Since there is no RMD required for 2020 then after you enter the 1099R say it was NOT an RMD and then that you rolled it over (even if back into the same account). It will show as income on the Turbo Tax Summary or Review so check the actual 1040. The amount should be on line 4a or 5a and say ROLLOVER by the taxable lines 4b or 5b.
You will still get credit for the withholding on 1040 line 25b.