I have indicated an IRA Distribution partially due to COVID yet TurboTax seems to be coming up with an incorrect amount based on my input. What should I do?

[AM65]

TurboTax is reporting $16,636 due to COVID. I have entered $14,069.20 due to COVID. I can't figure out how TurboTax arrived at $16,636. I have 3 1099-G's. One out of three is partially due to COVID. One is NOT due to COVID. The third 1099-G is entirely due to COVID. What should I do to rectify the amount due to COVID?

[macuser_22]

Are yiu asking about 1099-G's or 1099-R's

1099-G report unemployment or other government payments, 1099-R's report retirement distributions.

[AM65]

Apologies-meant to say 1099-R

[macuser_22]

Just enter the 1099-R's and if you qualify for a COVID related distribution answer yes to the COVID questions and the other COVID questions if you are repaying the amount back to the account or want to spread the tax over 3 years.

[AM65]

I understand that. But the calculation by TurboTax seems incorrect. What can be done to correct the calculation?

[macuser_22]

---

@AM65 wrote:

I understand that. But the calculation by TurboTax seems incorrect. What can be done to correct the calculation?

---

Exactly what is not correct?

[fanfare]

TurboTax Online does not calculate the correct taxable amount of a COVID_related distribution from an IRA with basis if the total distribution amount is over $100,000, whether you pay some of it back or not.

The only thing that can be done is to have TurboTax software development fix the problem(s).

Or find another tax software provider that does it correctly.

[macuser_22]

---

@fanfare wrote:

TurboTax Online does not calculate the correct taxable amount of a COVID_related distribution from an IRA with basis if the total distribution amount is over $100,000, whether you pay some of it back or not.

The only thing that can be done is to have TurboTax software development fix the problem(s).

Or find another tax software provider that does it correctly.

---

I see no error.    It took a while to understand the 8606 instructions and interactions with the 8915-E form but calculating it the IRS way using the 8606 instructions and 8915-E exactly  matched what TurboTax comes up with. 

The 8606 instructions example 2 covers this situation and TurboTax is correct.    (The $100,000 limit is part of the calculation.)

[fanfare]

@macuser_22 

please see this thread

https://ttlc.intuit.com/community/retirement/discussion/8915e-overstates-distributions-on-1040/00/21...

[AM65]

In this case, my total IRA distribution was well under $100K, so this comment does not apply to my case.

[fanfare]

TurboTax should be asking you how much, if any, of your 1099-R distribution is COVID-related for each 1099 you enter.

[AM65]

Thanks for your post (and for everyone else's post as well). Let me be clear about my case and concern. 

None of these withdrawals are early withdrawals and I do not have future plans to pay any of these withdrawals back to myself over time.

I had 3 1099-R's in 2020; each from a different IRA account.

First 1099-R:  On Jan 3 2020, the distribution was for $2,566.36 and $256.63 federal tax was withheld. I marked this distribution as NOT COVID-19 related.

Second 1099-R: On Jan 30 2020, Mar 2020, May 2020 and June 2020,  $4,085.20 was due to COVID-19 and $4,527.22 was NOT due to COVID-19. A total of $79.72 in federal tax was withheld. I indicated $4,085.20 of the total amount was due to COVID-19 and the rest of the amount was not due to COVID-19.

Third 1099-R: In Aug 2020, Oct 2020 and Dec 2020, $9,984.00 was all due to COVID-19. A total of $859.30 federal tax was withheld. I indicated that the entire amount was distributed as income due to COVID-19.

Why is TurboTax saying that the total amount of distributions due to COVID-19 is $16,636 and thus $5,545.33 could be declared as additional IRA income in 2020, 2021 and 2022?

I thought that TurboTax would compute that my COVID-19 related distributions totaled $14,069.20; thus only $4,689.73 would need to be declared as additional IRA income in 2020, 2021 and 2022... and furthermore, I would have to declare the additional $7,093.58 non-COVID related IRA distribution in 2020 because this amount could not be spread out over 3 years.

[AM65]

Yes, I understand that. TurboTax did ask me to quantify my COVID related distributions.  I did so but I still don't think the final reply from TurboTax correctly tallied my 3 year income declaration due to COVID so I now question TurboTax's conclusion as well as the tax refund calculated.

[fanfare]

When you use TurboTax Online, you must pay the fee before you can see Form 8915-E, and see the allocation that TurboTax made.

If you see that form and it is wrong, I'm not sure what you can do other than convince dmertz or customer support to enter a bug report.

OR

try a different tax software provider.

So far out of four software packages, I've got four different answers to my situation.

I believe one is correct, but it is not TurboTax.

I'll probably have to file on paper.

[fanfare]

combine all three 1099s into one, with a covid part, and a non covid part.

TurboTax should divide the covid part by 3.0, unless you elect otherwise.