Form 8606 WON'T be triggered if you are covered by a Retirement Plan at Work?

[easyxpress]

This can be a TurboTax bug for Tax Year 2023, assuming your MAGI is more than $136000 and have a Retirement Plan at work.

I am trying to make a non-deductible contribution to my Traditional IRA and then do the backdoor conversion to Roth IRA.

In TurboTax, steps to reproduce: 

- [PERSONAL] - [Deductions & Credits] - [I'll choose what I work on] - [Traditional and Roth IRA Contributions]

- Check the Traditional IRA

- Is This a Repayment of a Retirement Distribution? <-- NO

- Tell US How Much You Contributed <-- $7500 on both boxes

- Did You Change Your Mind? <-- NO

- Retirement Plan Coverage (at Work)? 

When I answer YES, after few more screens, I will get 'Income Too High To Deduct an IRA Contribution'. This is a problem or bug that TurboTax is ignoring the fact that non-deductible contribution to Traditional IRA is allowed, as it is not limited by the MAGI and/or retirement plan at work.

So I have to answer NO, then I will get to the correct screen: Choose Not to Deduct IRA Contributions.

Please see if you can confirm this problem and hopefully TurboTax can fix it.

[dmertz · Accepted solution]

You misunderstand what TurboTax is telling you.  "Income Too High To Deduct an IRA Contribution" means only that.  It is not saying that you are ineligible to contribute, only that you are ineligible to deduct the contribution.  Under these circumstances, TurboTax places the amount on line 1 of Form 8606 as required.