CARES Act - returning RMD

[dmertz]

For a distribution from an inherited IRA, you'll need to say that the distribution was not from an inherited IRA, complete the rest of the questions including indicating how much you rolled over, then edit the 1099-R form again and indicate that the distribution was from an inherited IRA.

[macuser_22]

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@dmertz wrote:

For a distribution from an inherited IRA, you'll need to say that the distribution was not from an inherited IRA, complete the rest of the questions including indicating how much you rolled over, then edit the 1099-R form again and indicate that the distribution was from an inherited IRA.

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I did not need to do that and it worked fine.

[dmertz]

I think the online and CD/download versions behave differently from each other with regard to this.

[crystalnsd66]

Thanks!  I guess I'll wait until the online version catches up or try a different online tax site if the fix isn't done by the 12th. PITA!!

[tehutchinsonjr]

This solution does not work if you select "I inherited this IRA" when entering your 1099-R.

I took an RMD from my inherited IRA early in 2020, but then repaid the entire amount (including withholding) back to the inherited IRA account within the allowed time limit.

My financial institution issued a 1099-R for the distribution, even though it was repaid.  I entered the 1099-R on Turbo Tax and indicated "I inherited this IRA" on a screen that asks that question.  Then on a subsequent screen that asks "How much was a RMD" I selected "None".  But the next screen did not ask rollover questions.  Instead the next screen indicated my entry of the 1099-R was now complete.

The only way to bring up the rollover question screen was to unselect "I inherited this IRA" from the earlier screen.  Once I did that the rollover screen finally appeared where I was able to select "Yes, I rolled over $xx,xxx.xx to another traditional IRA or retirement account (or returned it to the same account) using my own money."

Just letting you guys know.

[macuser_22]

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@tehutchinsonjr wrote:

This solution does not work if you select "I inherited this IRA" when entering your 1099-R.

I took an RMD from my inherited IRA early in 2020, but then repaid the entire amount (including withholding) back to the inherited IRA account within the allowed time limit.

My financial institution issued a 1099-R for the distribution, even though it was repaid.  I entered the 1099-R on Turbo Tax and indicated "I inherited this IRA" on a screen that asks that question.  Then on a subsequent screen that asks "How much was a RMD" I selected "None".  But the next screen did not ask rollover questions.  Instead the next screen indicated my entry of the 1099-R was now complete.

The only way to bring up the rollover question screen was to unselect "I inherited this IRA" from the earlier screen.  Once I did that the rollover screen finally appeared where I was able to select "Yes, I rolled over $xx,xxx.xx to another traditional IRA or retirement account (or returned it to the same account) using my own money."

Just letting you guys know.

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That appears to be in the online version only.   The desktop version works fine for an inherited IRA.     Saying it is not inherited is fine since nothing about that goes on a tax return at all.

[emorris812]

Part of your answer, "Indicate that you moved the money to another retirement account (or returned it to the same account), then indicate how much of the distribution you returned to the IRA."

When I entered my 1099-R information in Turbo Tax and I indicated that this was not a RMD, I was not provided with a question by the tax software about where I moved the money to.  In my case, I simply put back into the Inherited IRA account from where it came back in January 2020. I did this on August 21, 2020.

Any ideas of why I don't get this important question.  Since I can't seem to find it, it shows up as taxable income.

Help,

Ed

[macuser_22]

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@emorris812  wrote:

Part of your answer, "Indicate that you moved the money to another retirement account (or returned it to the same account), then indicate how much of the distribution you returned to the IRA."

When I entered my 1099-R information in Turbo Tax and I indicated that this was not a RMD, I was not provided with a question by the tax software about where I moved the money to.  In my case, I simply put back into the Inherited IRA account from where it came back in January 2020. I did this on August 21, 2020.

Any ideas of why I don't get this important question.  Since I can't seem to find it, it shows up as taxable income.

If there is a code 4 in box 7 (that means inherited) and TurboTax asks the additional question,"Was this inherited" answer NO.   That question is for prior years when rollover of inherited IRA's was prohibited and prevents the rollover.   For 2020, that question does not apply.       Only some versions of TurboTax still ask that question that should not be there.

[emorris812]

Your suggestion did the trick.  All is good for the adjustments you told me to do.

Thank you for your help. 

[lshaffer]

that worked after I read the entire comment by deleting then reentering as editing does not work

thank u

[Jak29672]

In 2020, I received RMDs fro 3 accounts. My IRA and 2 Inherited IRA accounts. Based on CARES, I return all 3 RMDs.  However in TurboTax, I am only given credit for my IRA.  The monies received for the Inherited IRA still show up as taxable even though I returned the money to each of the accounts in 2020.

Do I need to do something else to receive the credit so those distribution are not taxable?

Thank you

[UncleSamPayer]

I followed the steps as previously outlined and my INH-IRA was handled flawlessly.  TurboTax even asks if what I was doing was due to the CARES act.  Basically, you are taking the distribution and and rolling it over to a similar or original account.  TurboTax even asks if you are returning  the original taxes that were taken out.  You might have to delete the entry from forms in order to get the proper questions asked again.

[tehutchinsonjr]

Go back to the screen that asks several questions including whether the IRA was inherited. You need to deselect that it was inherited. Then when you proceed to subsequent screens indicate that the distribution was not an RMD. That will cause the next screen to appear asking if you did a rollover.  I too have an inherited IRA but could not get the rollover screen to appear until I pretended my IRA was NOT inherited. Apparently the problem only happens on TurboTax online version, not the disc. 

[Jak29672]

Thank you for suggestions. The regular IRA allowed me to mak necessary changes. I went back and deleted the 2 Inherited IRAs and then manually entered the information. By doing so, I could say the entire amount was rolled over, thus no tax. 

[taxman_44]

Would the explanation for how to handle the Cares Act RMD issue apply to the state as well? Would it be better to send the returns via the mail with the 5498 Form and a brief letter of explanation?

Are you getting enough feedback on this to create an updated fix before filing time?Thanks,

Bill M.