My 1099-R for my Roth IRA distribution shows the code " T " in box 7. What gives?

[dmertz]

The IRS does not use the amount in box 2a if the Form 1099-R has code T in box 7, so TurboTax properly ignores anything you enter there (except in the case where code T is used to indicate a distribution from an inherited Roth IRA because you must determine the taxable amount outside of TurboTax).

For a code-T distribution from a Roth IRA, you must click the Done or Continue button on the page that lists the Forms 1099-R that you have entered, then either indicate to 2022 TurboTax that you had a Roth IRA before 2018 (is that's true) or you must enter your basis in Roth IRA contributions and conversions so that TurboTax can calculate the taxable amount on Part III of Form 8606.

[Semievolved]

Hmmmm, I've gone through this several times to see if trying again makes any difference. At no point, do I get a prompt or screen that queries me about Roth history. Is this a glitch? I've tried it using all info imported directly from Fidelity and also entering information on my own, never get anything that asks for more information on my Roth with the "T" code.

[dmertz]

To reach the question that asks if your had a Roth IRA before 2018, you must click the Continue button on the page that lists the Forms 1099-R that you have entered.

[Semievolved]

Thank you, I did that, entered 2007 but it still shows my being taxed on the full distribution, even if I manually enter zero as the taxable amount and uncheck "taxable amount not determined". I have not yet found a way to untax the Roth distribution other than by changing the code from T to Q. Another poster indicated that the IRS won't see what code I submitted in my e-filing since there is no withholding and therefore, there's not a problem with my changing the T to a Q. Do you agree with that?

[dmertz]

"entered 2007"

I don't know where you are entering this, perhaps box 11 of the Form 1099-R which has nothing to do with this.  2022 TurboTax does not ask the year, it only asks if you  "Opened Before 2018?"  TurboTax will present this page in the general questions that TurboTax asks after you click the Continue button on the page that lists the Forms 1099-R that you have entered, make sure that you proceed far enough through the questions.

Yes, you could enter code Q instead of code T and get the same result as long as nothing was withheld for taxes, but it's not the proper way to do it.

[Semievolved]

I am using Premier not Deluxe, perhaps that is the difference? Anyway, it is the TurboTax section for filling in the 1099R information, which, since I imported, is the same as what Fidelity submitted although I can change or add information. I do not get the screen you showed asking if it was from before 2018, only the questions/blanks that correspond to the 1099 and, yes, Blank 11 asks what year the Roth was opened. I agree that changing the code to Q is not good but what choice do I have unless I want to get taxed on a qualified Roth distribution. Nothing else works.

[dmertz]

@Semievolved , it seems to me that you have not clicked the Continue button on the page that lists the Forms 1099-R that you have entered.  The question that asks if you had any Roth IRAs "open" before 2018 is not part of the entry of any particular Form 1099-R, it is asked after you have entered all Forms 1099-R and Continue to the general questions regarding retirement distributions.

[Semievolved]

I have indeed clicked the continue button and gone through every screen of the entire process multiple times all the way through to the "Done" button and have never seen the screen you describe pop up. I have deleted and re-entered the 1099R both through import and manual entry and never seen that screen. I'm not ignoring you or trying to be difficult, just saying that prompt has not arisen on the Premier version.

Are you saying that when you respond that you had the Roth prior to 2018, that TurboTax then doesn't tax teh distribution eventhough the "T" code is still indicated in Box 7?

[dmertz]

When you answer Yes to the question asking if you had a Roth IRA open before 2018, TurboTax treats code T the same as code Q.

I can't imagine why TurboTax is not presenting the question.  Perhaps in the version that you are using TurboTax presents the question after clicking the Done button.  If you are using the CD/Download version, you can switch to forms mode, open the IRA Information Worksheet and mark the Yes box on the first line of Part V that Worksheet.  (If the worksheet shows that you have any pre-2018 or 2018 basis in Roth conversions, perhaps TurboTax won't ask the question because it already knows the answer; check this worksheet.  It's possible that the online and CD/download versions behave differently in this respect.)

[Semievolved]

OMG, you're my new hero! I did as you said, and for some reason on the worksheet "No" was checked for whether I owned a Roth before 2018. I changed to "Yes" exited the worksheet and changed the "Q" back to "T" and for the first time, the Roth distribution is not being taxed. Thank you very much!

[mkl53189]

I keyed the 1099 code t correctly;  looked at the list summary and turbotax is making it taxable.  how to correrct?

[ThomasM125]

The only part of your ROTH IRA contribution what would be taxable would be the income earned on the account, assuming your distribution is non-qualifying. That would be the difference between what you contributed to the account and its current value at the end of the tax year, taking into consideration distributions made. One key entry would be where you enter your prior year ROTH IRA contributions, you have to make sure you don't include earnings or losses, or amounts converted from a traditional IRA:

You need to make sure that entry is correct, along with the other amounts requested in the program. I suggest you go back through your Form 1099-R entries and make corrections as is needed.

@mkl53189