I had an excess Roth IRA contribution carried forward from 2019 (tax was paid on the excess at that time and no contributions were withdrawn) that I would like to carry forward and contribute toward my 2020 contribution limit to eliminate the excess. However, I am receiving an error "IRA Contributions Worksheet: Line 27 - Taxpayer's excess Roth IRA contribution credit should not be more than zero."
2019 excess contribution = $E
2020 new contribution = $X
$E+X is less than my contribution limit for 2020
In the IRA Contributions Worksheet, Lines 19 and 24 currently have a value of $X, Line 26 = $E (excess), and Line 27 = $E+X. The value in Line 26 is highlighted in red indicating an error.
Can anyone help me understand the error and how to update the worksheet to indicate that I am applying this excess from last year toward my 2020 Roth IRA contribution to eliminate the excess? Thanks!
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This is a bug in TurboTax's error checking. The entry on line 26 of the IRA Contribution Worksheet is actually correct, despite TurboTax saying otherwise. Everything else in TurboTax is handling this entry correctly, it's just the error check for this line that appears to be failing to compare to the amount on line 10 of the IRA Information Worksheet.
@Katie_B I've uploaded Token 743629 demonstrating this bug.
[Edit] This worked fine in 2019 TurboTax R49 and became broken in 2020 TurboTax R1.
@dmertz Thanks for your answer! Do you have an idea how long until this bug is fixed in the software?
It's rare that one finds out when a bug fix will be implemented before it just appears in a release.
Maybe @macuser_22 has heard something about this bug. I don't recall any acknowledgement that this has been accepted as bug (although it's clearly a bug in the error checking).
Actually I was not aware of that bug.
@macuser_22 , perhaps you could pass this along to someone who could look at the file I uploaded. I think this one fell through the cracks.
Will do.
I appear to be facing the same issue - anyone have any updates on this?
After looking at this again, it seems that TurboTax's calculations on the forms are now automatically applying whatever amount of excess Roth IRA contributions carried into the current year that its possible without having any entry on line 26 of the IRA Contribution Worksheet, making line 26 obsolete and flagging an error if any entry is made there. However, I think that step-by-step mode is still asking how much to apply and filling in line 26, so there is a bit of a disconnect between the operation of the forms and the operation of step-by-step mode unless that's been resolved since the last time I looked at it. I'm not sure when TurboTax was changed to not use the entry on line 26, but the version of 2019 TurboTax I checked behaves the same as 2020 TurboTax.
The problem with the current implementation is that it's not treating the application of the excess as a current-year contribution as a contribution that qualifies for the Retirement Savings Contributions Credit.
If one would not qualify for the Retirement Savings Contributions Credit anyway or has at least $2,000 of other retirement contributions that would be used in the calculation of this credit (or the individual simply doesn't want to qualify for this credit), one can get around the error by simply deleting the line-26 entry.
(Apparently this behavior is the result of an ill-conceived fix to the problem I reported years ago where treating the excess as a current-year contribution was duplicating the basis. Had they implemented the fix the way I had suggested in that problem report, they would not have created this new bug. The fix I suggested was to continue to apply the excess as the current-year contribution as they had been doing, but also reduce the contribution basis by the amount applied, canceling out the duplication of basis.)
Has this been resolved having similar issue for 2023?
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