I rolled over the 2020 inherited IRA RMD back to the same IRA, because of the 2020 CARES Act waiver, but TurboTax is counting it as part of my taxable income. How to fix?

[kso808]

I cannot find within the desktop TurboTax platform where this is addressed and how to correct.  What can I do to correct?

[Bsch4477]

When reporting your 1099-R say that the distribution was NOT a RMD and then you can report the amount returned to your IRA. 

[kso808]

I do report that the distribution was not an RMD, but after that, I receive no prompts to tell TurboTax (desktop) that I rolled the RMD back to the same IRA.  There's where I'm having trouble.  I have uploaded my Form 5498 from my IRA custodian to TurboTax, and that form does list my rollover contribution back to them.  Is there anything else I can do, because the taxable income and amount of federal tax owed still shows as the same.

[dmertz]

Delete the 1099-R from TurboTax and reenter it.  Once you've indicated that the distribution was an RMD, TurboTax will continue to treat the distribution as ineligible for rollover even though you change the answer to the RMD question to indicate that it was not an RMD.

[kso808]

I've done all this, but my taxable income amount is still not corrected by TurboTax.  It tells me I owe $59.00 in federal taxes, when I should be getting a refund of $241.00.  Clearly, there's something missing in their programming.  It's asking me how I wish to pay before I can get everything corrected.

[Bsch4477]

Is there an amount on line 4b of your 1040?

Did the program ask if any of your distribution was rolled over?

[SweetieJean]

The IRS has a new Form 8915-E for COVID-19 related retirement account withdrawals.  This form has not been finalized by the IRS for filing with a 2020 federal tax return.  The IRS has not announced when this form will be available.  Once available it will be included in the TurboTax software.

We estimate the form may be available sometime in February.

[kso808]

This was not a COVID-19 withdrawal.  It was regularly scheduled RMD from my inherited IRA account, which I receive annually, every February.  My IRA custodian, Fidelity, notified me months later, in July, of the 2020 CARES waiver for taking RMDs, and that I could repay the same RMD amount received earlier back to the same IRA.  This change was generated by a ruling from the IRS in June 2020.  This was acknowledged as a rollover contribution on my Form 5498 for the same inherited IRA account I received from Fidelity. I have uploaded a copy of that 5498 to TurboTax, but so far, it has not made any difference in my original taxable income (including the original February RMD).

[kso808]

As an addendum to my first reply to you below, I have also noticed that when I attempt to upload my Fidelity 1099-R to Turbo Tax, that Fidelity is now saying to wait until January 30, 2021 before uploading, which is another way of saying that I think they're going to issue corrected 1099Rs for those this situation applies to.  Hopefully, I'm right.

[dmertz]

There is nothing wrong with your Form 1099-R.  There is no reason to expect Fidelity to change it.  The same situation involving waived RMDs  occurred in 2009, so the experience in dealing with them already exists.  Unfortunately, TurboTax developers did not draw on that experience and instead provided misleading instructions on the page that asks if the distribution was an RMD.

Delete the 1099-R from TurboTax and reenter it.  Be sure to indicate that the distribution was not an RMD.  Then indicate that the distribution was moved to another retirement account or returned it to the same account and indicate that amount that was rolled over.

[perdoch]

i have the same problem.  how do you indicate on the 1099 entered manually that the amount was not RMD and was put into another or the same IRA.  not obvious to me.  thanks,

Jim

[Irene2805]

To indicate that you returned your required minimum distribution (RMD) to your IRA, please follow the steps below (indicate that the distribution was NOT and RMD):

TurboTax Online

1. Click on Federal > Wages & Income.
2. Scroll down to the Retirement Plans and Social Security section and click on the Start/Revisit box next to IRA, 4701(k), Pension Plan Withdrawals (1099-R). 
3. If you've already entered one (or more) 1099-Rs, you will see a screen Your 1099-R Entries.  Click the Edit link next to the 1099-R you wish to review.   
4. On the screen, Tell us if you moved the money through a rollover or conversion, mark the radio button,  I rolled over some of all of it to an IRA... and click Continue.  [Screenshot #1, below]
5. A few screens after the 1099-R input screen, you should see a screen, What Did You Do With The Money From 401k institution?  Mark the radio button next to I moved the money to another retirement account (or returned it to the same retirement account).  
6. On the next screen, Did you rollover the gross amount of $XX (Box 1)...  mark the appropriate radio button and click Continue.

TurboTax CD/Download

1. Click Federal Taxes > Wages & Income > I'll choose what I work on
2. Scroll down to the Retirement Plans and Social Security section and click on the Start/Revisit box next to IRA, 4701(k), Pension Plan Withdrawals (1099-R). 
3. If you've already entered one (or more) 1099-Rs, you will see a screen Your 1099-R Entries.  Click on the Edit link next to the 1099-R you wish to review.   
4. A few screens after the 1099-R input screen, you should see a screen, What Did You Do With The Money From this Payer?
5. Mark the radio button next to I moved the money to another retirement account (or returned it to the same account).  [Screenshot #2]
6. Below the grey line, click the radio button next to I rolled over all of this money to an IRA or other retirement account (or returned it to the same account).  Click Continue.

Screenshot #1

Screenshot #2

@perdoch

[Frustratedx100]

We are using the desktop version of Turbotax Premier for Window. 

My husband has an IRA that he inherited from his Mother.  We took out money early in 2020, but then rolled it back later in the year via the CARES Act. So we received both a Form 1099-R and a Form 5498 from our brokerage.

Even though I click the "This is not an RMD" selection, I never get to the screens about "What did you do with the money from this Payer?" 

I've already tried deleting and downloading the 1099-R again.

I've tried deleting and manually entering the 1099-R again. 

I've tried going into Forms view and manually checking the roll-over box on the 1099-R Form.

Nothing seems to work and the money is still showing up as taxable income when it shouldn't be under the CARES Act.

How do we fix this?  

[dmertz]

To get TurboTax to allow the distribution to be reported as rolled over, you'll need to indicate that the distribution was not from an inherited IRA.

[Frustratedx100]

Isn't that lying to not say it's an inherited IRA?  You'd have to omit the information in Box 7, where the Distribution Code = 7- Death