CARES Act - returning RMD

[KCAre]

Code in box 7 is 7.

[macuser_22]

The "moved" the money screen should be right after the RMD question.   Delete the 1099-R and re-enter.

[bn8]

same problem as previous people except I was not able due to

sickness to reverse the RMD before 8/31/20.  What I want to do, is correct the 1099R and show 2a NO taxable amount. Return the money and then file the taxes before 5/17/21 -- since the IRS and you are trying to be soo helpful thru the Covid19 crisis.

Want answer from Turbo Tax SPECIALIST !

[macuser_22]

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@bn8 wrote:

same problem as previous people except I was not able due to

sickness to reverse the RMD before 8/31/20.  What I want to do, is correct the 1099R and show 2a NO taxable amount. Return the money and then file the taxes before 5/17/21 -- since the IRS and you are trying to be soo helpful thru the Covid19 crisis.

Want answer from Turbo Tax SPECIALIST !

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A 1099-R for a Traditional IRA can NEVER have a box 2a anything other than the same amount as box 1.    If not rolled back before 8/31/20 then the distribution is taxable.

Why think the 1099-R is not correct?

[dsachnoff]

Both my wife and I received RDM's for 2020 from USAA at the beginning of the year.  In June 2020 Charles Schwab took over our IRAs.  I returned the total distribution to Charles Schwab in July since the IRS allowed RMDs to be returned.  Since I paid the taxes at time of distribution I thought perhaps I should move the funds to a Roth.  In so doing I received another 1099R.  So now I have two 1099Rs as does my wife.  One from USAA and the other from Schwab.  How and where do I indicate the initial funds were returned, however, to Schwab since they now handle the IRAs?  It seems like I am getting taxed twice for the RMDs in Turbo Tax.

Don

[macuser_22]

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@dsachnoff wrote:

Both my wife and I received RDM's for 2020 from USAA at the beginning of the year.  In June 2020 Charles Schwab took over our IRAs.  I returned the total distribution to Charles Schwab in July since the IRS allowed RMDs to be returned.  Since I paid the taxes at time of distribution I thought perhaps I should move the funds to a Roth.  In so doing I received another 1099R.  So now I have two 1099Rs as does my wife.  One from USAA and the other from Schwab.  How and where do I indicate the initial funds were returned, however, to Schwab since they now handle the IRAs?  It seems like I am getting taxed twice for the RMDs in Turbo Tax.

Don

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I answered that a few posts ago but I will repeat.

The conversion 1099-R will be fully taxable.

Delete the 1099-R you rolled over entered and re-enter.

Answer the RMD question that "None of this distribution was a RMD" or "RMD not required" depending on the TurboTax version - because it was NOT a RMD, there were no 2020 RMD's.

If this is an inherited IRA then answer the "Is this IRA inherited" with NO. The purpose of that question is to PREVENT rolling an inherited IRA over, but is allowed for 2020 only.

Then you will get the screen to say it was "moved" and all rolled over.

Also check the box that this was NOT a COVID related distributions - it was a RMD that was returned.

That will put the 1099-R box 1 amount on the 1040 form line 4a with the word ROLLOVER next to it.

[rdmphd]

My Husband and I did not take all of our RMD. On turbotax I indicated the amount we took and the amount that was required.  One section asks did I receive all RMD, Was it not all  RMD or I was not required to take an RMD for 2020.  How should that be answered?

Thank you 

[macuser_22]

Delete the 1099-R you entered and re-enter.

Answer the RMD question that "None of this distribution was a RMD" or "RMD not required" depending on the TurboTax version - because it was NOT a RMD, there were no 2020 RMD's.

I

[dsachnoff]

There were RMD distributions in 2020 as I took one in January 2020, however, the IRS allowed those who took the RMD to rollover the RMD distribution into the same IRA or another IRA without penalty if you wanted to do that.  In my case since the tax was already paid with the RMD distribution, I did a rollover and then took money out of my savings account in the same amount and placed it into a ROTH.  

[AmyC]

@dsachnoff  You took an RMD in January and the law changed so that there is no such thing as an RMD for 2020 (there is a special reason that question still exists- but it does not apply to you) Answer that none of it was RMD. You will enter the USAA form which includes the tax withheld. When you enter the amount rolled back in, enter the full amount you rolled in, if it included the taxes withheld. This makes the USAA distribution nontaxable. The conversion from Schwab will be taxable as it turned into a ROTH.

@macuser_22 is correct.

[macuser_22]

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@dsachnoff wrote:

There were RMD distributions in 2020 as I took one in January 2020, however, the IRS allowed those who took the RMD to rollover the RMD distribution into the same IRA or another IRA without penalty if you wanted to do that.  In my case since the tax was already paid with the RMD distribution, I did a rollover and then took money out of my savings account in the same amount and placed it into a ROTH.  

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If you put the money back into a *Roth* then that is not a rollover - it is a *conversion* and is taxable income.   You changed from a before-tax IRA to an after-tax Roth so you must pay the tax now.    You can only roll a before tax Traditional IRA back to a Traditional IRA for it not to be taxable.

[dsachnoff]

Hopefully my final question. I forgot to enter my allowed Roth contribution when I filed last week.  I assume this requires an amended 1040-X.  The allowed contribution was based on earned income as determine by TT.  There is no deduction allowed and no additional taxes due since this an after tax Roth.

[dsachnoff]

The money was placed back into my traditional IRA so no taxes due, however, since the taxes were taken at the time of distribution I decided to put the same amount from my savings account equal to what I rolled back into an after tax Roth since I already paid the taxes from the rolled over RMD.