How to file State Tax (Alabama) for Backdoor IRA Conversion from Transition to Roth IRA?

There is no taxable income from a Backdoor IRA conversion unless there are earnings on the amount contributed to the Traditional IRA before it is converted to the Roth IRA.  You do not need to enter any additional information for the Backdoor IRA conversion to your Alabama state return.  TurboTax automatically takes the calculation from the Federal information and enters it on your Alabama.  With zero tax on Alabama indicates there were no taxable earnings on the amount converted from the Traditional to the Roth.

 

 

Follow these steps to report your Backdoor IRA conversion in TurboTax Online:

 

Step 1:  Enter the Non-Deductible Contribution to a Traditional IRA

1. Open your return if it’s not already open.
2. Inside TurboTax, search for IRA contributions and select the Jump to link in the search results.
3. Select Traditional IRA on the Traditional IRA and Roth IRA screen and Continue.
4. Answer Yes to Did you Contribute To a Traditional IRA?
5. Answer No to Is This a Repayment of a Retirement Distribution?
6. On the Tell Us How Much You Contributed screen, enter the amount contributed and continue.
7. Answer No on the Did You Change Your Mind?
8. Depending on your situation, answer the remaining questions.

Step 2:  Enter the Conversion from a Traditional IRA to a Roth IRA

1. Inside TurboTax, search for 1099-R and select the Jump to link in the search results.
2. Answer Yes on the Your 1099-R screen and continue.
   • If you land on the Your 1099-R Entries screen, select Add Another 1099-R.
3. Select how you want to enter your 1099-R (import or type it in yourself) and follow the instructions.
4. Answer No to Did You Inherit the IRA from (payer)?
5. Answer I moved the money to another retirement account (or returned it to the same retirement account) on the What Did You Do With The Money From (payer)?
6. Next, choose I converted all of this money to a Roth IRA account.
7. Continue answering questions until you come to the Your 1099-R Entries screen.

How to enter a Backdoor Roth conversion in 2020 fo...