Received 2 1099-Rs One code Y (QCD) one code 7 for the total RMD

[markhaefele]

When entering two separate 1099Rs (the second for the QCD) for one IRA account - when you enter the required RMD it concludes you have not taken the full amount - and does not then include the second code Y QCD 1099 for the same IRA account.  It then calculates a penalty tax on 5329.

The only way I found to make it work is to use code 7 on both 1099's and split the required RMD between them. Then there is no penalty calculation.  However, I don't like that as it's a Red Flag for IRS - since no number matches the total required RMD.

Any other solutions? or is this a program change required in TurboTax?

[MinhT1 · Accepted solution]

If you are sure that you have satisfied all RMD requirements, then in TurboTax, on each form 1099-R for RMD withdrawals, answer that The entire distribution was an RMD then on the following page, to the question What is the RMD for your account? enter the amount of the distribution from that IRA account.

By doing this, you are telling TurboTax that all RMDs are satisfied and TurboTax will not calculate any penalty. The information you entered in TurboTax is to enable TurboTax to calculate any penalty where applicable, and is not reported to the IRS. Your total RMD is not reported to the IRS either.

TurboTax will also reduce your taxable amount by the amount transferred to charity.

[saabstory2000]

I agree this is a major Turbo tax input and software problem. I have spent 4 hours with two different analysts at TT and if we input the two separate 1099s from the brokerage house (this year the sent a 1099 for the amount distributed to me which was taxed and a 1099 for the amount of the QCD)  even using the Code 7 for the QCD amount TTax  calculates a huge  penalty on the Form 5329. (my QCD was about 1/3 of the RMD)   On this last call the analyst opened an investigation after seeing how it is not working properly.  The more people who call the faster they will fix it.  I don t want to jerryrig 1099 entries and red flag to the IRS. I agree with those concerns expressed here.

on TT wHen I click help and don't get any info after a few inputs I get an option to call with a support ID number.  I usually wait 10-20 minutes this time of year or they will do a call back.  I have premier TT this year.  Hope this helps other people.