How will the 2020 Turbotax program allow me to report required minimum distributions that were redeposited under IRA Notice 2020-51?

[Opus 17]

We can't answer that because the program has not been released yet.  I suspect the IRS will either create a new tax form or add some lines to one of their existing forms.  It may even be that the very first versions of Turbotax that are released in November won't cover all the tax law changes.  But by the time the program is updated and ready to file a tax return (usually between Jan 15-31), it will cover all the tax situations (because the IRS won't approve it for connecting to the e-file system until is passes all the IRS tests and includes all the current tax rules and forms.)

[dmertz]

As with any distribution reported on Form 1099-R that is not an RMD, you'll simply indicate that no part of the distribution was RMD and that you rolled over the entire amount.

(Because of the CARES Act, what was distributed as intending to be an RMD was actually not an RMD.)

[ttaxhar]

Unfortunately before IRS Notice 2020-51was issued I had several RMD payments.  That IRS Notice waived the 60 day rollover and the once a year rollover rules, so my redeposit of these funds will be treated as rollovers.  The Form 1099-R I expect to receive will show the total amount as a normal distribution (Code 7) and IRA box checked. The taxable amount unknown box will be checked.  So for tax purposes this is reported as a RMD, albeit one that has been rolled over.  Because this is a one time waiver of two rules, I was wondering how TurboTax will handle it.

[dmertz]

Forms 1099-R do not identify distributions as being RMDs, they simply report distributions.  It's not an RMD since the law (the changes to the tax code made by the CARES Act) says that it's not an RMD.  You'll simply enter it in TurboTax as a rollover of a distribution that is not an RMD.

(The 'R' in 'RMD' is for the word 'Required.'  Since the CARES Act removed the requirement for 2020, the distribution was not required and therefore is not an RMD.)

[ttaxhar]

Ah the tax code, so clear and yet so oblique.  The requried Form 1099-R box 7 will show my RMD as (7) a normal distribution from an IRA (checked box).  You are correct that it does not say RMD, but the IRS uses Form 1099-R and Form 5498 (filed by my broker) to see if I met my normal RMD.  Notice 2020-15 clairifies for this tax year no RMD is required AND that I am allowed to rollover an already taken RMD for no tax.  Thus a normally taxable distribution rolls over to create no tax.  But since the existing rules (60 day rollover time limit and one a year rollover) covering rollovers had to be waived to let this happen, what will Turbotax (presumably programmed under the old rules) do.  That is my question.

[dmertz]

TurboTax asks no questions about the timing of rollovers nor has it ever had any feature to detect violations of the one-rollover-per-12-months limitation.  For rollovers conforming to Notice 2020-51 you can simply ignore any mention in TurboTax's help that implies that a rollover had to have been done withing 60-days of the distribution (or for rollovers of other distributions made after January 2020 that had the rollover deadline extended to July 15 by the IRS under Notice 2020-23 as a result of the emergency declaration).  The 60-day rollover deadline still applies to other distributions.

TurboTax has never done any calculations of what RMDs should be.  If in TurboTax's existing follow-up questions you tell TurboTax that it is not an RMD and you tell TurboTax that the distribution was rolled over, TurboTax will treat it and report it as having been rolled over.  No changes are needed to TurboTax's existing behavior for you to be able to report this rollover.

[ttaxhar]

The info on how Turbo Tax queries the 1099-R info is helpful.  Thanks.

[WJHAYEN]

It is now the end of January and Turbotax is not correctly handling the rollover of 2020 RMDs that have been returned to the IRA where is came from initially.  The screens ask the question about whether the money was rolled over back into the IRA and then the statement that this money is not taxable but then include in taxable income in the final screens.  Turbotax needs to be fixed on this point.  When will that happen????

[dmertz]

Delete and reenter the 1099-R from TurboTax.  In the follow-up questions, indicate that none of the distribution was RMD, indicate that you moved the money to another retirement account or returned it to the same account, then indicate the amount rolled over.  TurboTax will exclude the amount rolled over from the taxable amount on Form 1040 line 4b and will include the word ROLLOVER next to the line.

[NJP6]

I had 2 RMD distributions, 2 different banks, both distributions were returned to the 2 banks. Bank 1 made me open a new CD account with a new number & in 2021 sent me a 1099R.

Bank 2 let me put the money back into the same account but sent me no 1099R, BUT, in May 2020 this distributionn was reported to the IRS. So I called this bank thinking their 1099R was lost in the mail. I am still waiting for the bank to call me back with an answer. Neither bank sent me a 5498, should they have?

[fanfare]

5498 helps the IRS, not you.

You should get a 1099-R from both banks.

how do you know it was reported in May if neither bank sent you a 5498?

[mongodog48]

How will I report RMD taken in first half of 2020 and allowed to redeposit same amount  back into IRA by 8/31/2020??

[Irene2805]

To indicate that you returned your required minimum distribution (RMD) to your IRA, please follow these steps:

TurboTax Online

1. Click on Federal > Wages & Income.
2. Scroll down to the Retirement Plans and Social Security section and click on the Start/Revisit box next to IRA, 4701(k), Pension Plan Withdrawals (1099-R). 
3. If you've already entered one (or more) 1099-Rs, you will see a screen Your 1099-R Entries.  Click the Edit link next to the 1099-R you wish to review.   
4. On the screen, Tell us if you moved the money through a rollover or conversion, mark the radio button,  I rolled over some of all of it to an IRA... and click Continue.
5. A few screens after the 1099-R input screen, you should see a screen, What Did You Do With The Money From 401k institution?  Mark the radio button next to I moved the money to another retirement account (or returned it to the same retirement account).  
6. On the next screen, Did you rollover the gross amount of $XX (Box 1)...  mark the appropriate radio button and click Continue.

TurboTax CD/Download

1. Click Federal Taxes > Wages & Income > I'll choose what I work on
2. Scroll down to the Retirement Plans and Social Security section and click on the Start/Revisit box next to IRA, 4701(k), Pension Plan Withdrawals (1099-R). 
3. If you've already entered one (or more) 1099-Rs, you will see a screen Your 1099-R Entries.  Click on the Edit link next to the 1099-R you wish to review.   
4. A few screens after the 1099-R input screen, you should see a screen, What Did You Do With The Money From this Payer?
5. Mark the radio button next to I moved the money to another retirement account (or returned it to the same account).
6. Below the grey line, click the radio button next to I rolled over all of this money to an IRA or other retirement account (or returned it to the same account).  Click Continue.

@mongodog48

[macuser_22]

Just enter the 1099-R and answer the RMD question that "None of this distribution was a RMD". then indicate that it was rolled over.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]