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]

Just for kicks I changed my first 1099-R to be COVID related distribution and said that only $1 was COVID related. Sure enough that sort of corrected the bug in TurboTax and got me closer to the correct calculation.

I hope TurboTax sees this little exercise and corrects their program before I get ready to file my taxes this year!

[dmertz]

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@AM65 wrote:

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.

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This is exactly the result I get on Form 8915-E when I make the entries as you stated.  Adding the $7093 of non-CRD distributions results in $11,783 on Form 1040 as expected.

It seems that somehow you indicated that the $2,466.36 distribution was a CRD.  Delete and reenter that Form 1099-R.

[AM65 · Accepted solution]

Thanks for your suggestion to delete and add the initial distribution. That did the trick! I recall that when I initially added the distribution, I indicated it as a CRD but I also explicitly recall changing the CRD status to non-CRD. I guess that status switch did not get applied correctly so deleting and re-adding would have been the correct workaround.  I believe this to be a bug that should be fixed and folks should be aware of this issue until it is fixed in the online version of TurboTax.

[macuser_22]

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@AM65 wrote:

Thanks for your suggestion to delete and add the initial distribution. That did the trick! I recall that when I initially added the distribution, I indicated it as a CRD but I also explicitly recall changing the CRD status to non-CRD. I guess that status switch did not get applied correctly so deleting and re-adding would have been the correct workaround.  I believe this to be a bug that should be fixed and folks should be aware of this issue until it is fixed in the online version of TurboTax.

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Some answers go on different forms.   Simply repeating the interview and bypassing that question  down not changed the original answer on the form.      Editing the form is not a "reset" - deleting the form is.

[MickeyM00se]

I believe I have encountered the same issue with TurboTax Premier (Windows), and it's got to be a bug.  An IRA distribution that's only partially due to COVID should result in a taxable amount for 2020 that is LESS than the total IRA distribution, but TurboTax is reporting a taxable amount that's HIGHER than the total IRA distribution.  (This is for a distribution well under $100k, by the way - others have reported bugs for large distributions.)

The correct formula would be:  taxable amount for 2020 = [non-COVID portion] + [1/3 of COVID portion]

The formula they seem to be using is: taxable amount = [entire distribution] + [1/3 of COVID portion]

I verified what was happening by changing back and forth in the interview between "not due to COVID at all", "fully due to COVID", and "partially due to COVID", and each time I switched to forms-view and looked at my 1040. It was very clear that when "partially due to COVID" was selected, TurboTax added 1/3 of the COVID portion to the ENTIRE distribution amount instead of adding it to the non-COVID portion. Here are the numbers (for a distribution of $11,000.. the taxable amount is from line 4b of the 1040..)

None of distribution is due to COVID..   taxable amount, $11000.. correct.

All of distribution is due to COVID...  taxable amount, $3667.. correct (rounding error ok)

$6000 of the $11000 distribution is due to COVID... taxable amount, $13000.. WRONG! (s/b $7000)

$10999 of the $11000 distribution due to COVID.. taxable amount $14666.. WRONG! (s/b $3667.33)

If I subsequently tell the interview that all of the distribution is due to COVID, TurboTax corrects itself and restores the correct number ($3667) to the 1040.. so I don't believe I need to delete and re-add my 1099. But I would very much like to have TT properly calculate the taxable amount for a partial COVID-related distribution (I'd edit the forms manually but I don't like overriding calculated numbers and I can't tell where TT is doing the actual math..)

(I uploaded the latest version of TT and re-checked all the above before posting this message.  Version number is [phone number removed].)  Edited to say: it's NOT a phone number, it's a version number! Lets try again.. 020 dot 000 dot 1690

[dmertz]

@MickeyM00se , I'm unable to reproduce that symptom.  You are indeed using the latest version of TurboTax, Release R24.

Do you have any other Forms 1099-R that you've entered?

I suggest making a copy of your tax file on which to experiment, then deleting Form 8915-E and allowing it to regenerate.  Also try deleting the 1099-R, deleting the 1099-R Summary if it remains, then reentering the Form 1099-R manually.

What is the code in box 7 of the Form 1099-R?

Any basis in nondeductible traditional IRA contributions?

Have you examined Form 8915-E lines 5 and 19?

[Jack_N_Atlanta]

I'm coming up with a similar issue, let's just say same place, different outcome.  I have two 1099-Rs, one is from a Roth-IRA, for $72000, box 7 is "T".  The second is for a Traditional IRA, $75000, box 7 is "7" and the IRA/SEP/SIMPLE box is checked.  Filing MFJ, however spouse is deceased 3/2/2020.  Only other items on the 1040 are 300 in qualified dividends/324 ordinary and -25000 on line 8 which is from schedule E rental property.  If on the traditional IRA I say this is or is not for a qualified disaster/covid then I'm shown a normal tax due of $1040 (I'm owed the 2nd stimulus still).  However, if I say it is withdrawn due to COVID, suddenly I owe $123,279,815.   A little steep on ~$50,300 of taxable income!  I can further toggle the issue by saying that its partially for Covid and entering $0, but $1 will revert back to the very large number.  I did test positive for covid last July.   There is a problem somewhere in the math, or taking 999,999,999 and multiplying it by 0.1233 

[tahoemcb1]

my 1099 R's $3.076.15 and $18,719.34 and $9,000 = $30,795.49 vs $30,865 shown on line 4b of 1040-SR?

[tahoemcb1]

1099-R

[AmyC]

Is there a box 1 vs box 2 difference? The totals vs the taxable amounts. The totals don't affect your return but the taxable amount does. Is that number correct?

@tahoemcb1

[fanfare]

It's a little late to be trying to workaround TurboTax bugs.

See my post above from 3-19. 

I long ago went on to other tax software providers.

Guess what they did it wrong also but came up with different amounts.

I finally found one that did the calculations correctly.

[hellodoreen]

If Turbo Tax cannot get this fixed soon, I am switching to another lower priced on line tax prep company  as it relates to the 3 year 1040 tax distribution WITHOUT penalty for the 2021 Coronavirus retirement fund distribution for the Cares ACT and IRS Form 8915-E.

Good luck reaching anyone at Turbotax about this!!!

[macuser_22]

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@hellodoreen wrote:

If Turbo Tax cannot get this fixed soon, I am switching to another lower priced on line tax prep company  as it relates to the 3 year 1040 tax distribution WITHOUT penalty for the 2021 Coronavirus retirement fund distribution for the Cares ACT and IRS Form 8915-E.

Good luck reaching anyone at Turbotax about this!!!

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The 8915-E for is scheduled for the 3/31 update.

See: https://ttlc.intuit.com/community/forms/help/irs-forms-availability-table-for-turbotax-individual-pe...