In 2020 I took out my total RMD and then due to th...
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New Member

In 2020 I took out my total RMD and then due to the CARES act I returned a portion of it, how do I report it on my Federal Return?

 
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Employee Tax Expert

In 2020 I took out my total RMD and then due to the CARES act I returned a portion of it, how do I report it on my Federal Return?

Since the RMD rule is suspended, RMDs taken in 2020 are considered eligible for rollover. Therefore, RMDs can be rolled over to another IRA, another qualified retirement plan, or returned to the original plan by August 31, to avoid paying taxes on that distribution. Here is how to report this in Turbo Tax.

  1. Go to federal>wages and income>retirement plans and social security>Ira (401K), pension plan Withdrawals(1099R) Edit
  2. Select edit next to the 1099-R that was the RMD distribution
  3. Next screen you mention that this is from a qualified plan
  4. Next screen is important. You must indicate that none of this withdrawal was an RMD>continue
  5. Next question asks you what you did with the money here you will indicate you moved it to another retirement account or returned the money to the same retirement account.
  6. A drop down will now appear on your screen and you will choose did a combination of rollover, converting, or cashing out the money.
  7. When you choose this, a screen will appear that will allow you to enter the amount that you returned to the same retirement account.
  8.  
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New Member

In 2020 I took out my total RMD and then due to the CARES act I returned a portion of it, how do I report it on my Federal Return?

I took out the full RMD amount in January.  In August I returned a portion to the traditional IRA.  In December i took part of that returned amount from the traditional IRA and rolled it into a Roth IRA.  As a result of all this I received a 1099-R that includes the total RMD amount that I originally took plus the amount that I rolled into the Roth IRA.  I also received 2 Form 5498's.  One shows the amount that I returned to the traditional IRA on Line 2.  The other 5498 shows the amount that I transferred to the Roth IRA on Line 3.  How do I enter all this in TurboTax so that Lines 4a and 4b on Form 1040 are correct?  Thank you.

PS - Where will I find your response to my question?

 

Employee Tax Expert

In 2020 I took out my total RMD and then due to the CARES act I returned a portion of it, how do I report it on my Federal Return?

By adding your user name here you should see the answer more quickly @mollyjack8478.  

 

1. RMD full distribution in January and returned in August: Delete the 1099-R and re-enter.  Answer the RMD question that "None of this distribution  was a RMD",  because is was not - there was no RMD.  Then you should get the screen that allows you to rollover (roll it back).

2. Distribution from IRA rolled into a Roth IRA in December: My suggestion is to add a second 1099R with the same payer information, the second one for the this distribution.

 

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.
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