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New Member

Required minimum distribution of Tax Sheltered Annuity

I am required to take a distribution from my Tax Sheltered Annuity as I'm 70 1/2.  If I roll it over directly to an IRA will it count as income?  If it is income, where does it get reported on my federal tax return?

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Level 15

Required minimum distribution of Tax Sheltered Annuity

RMDs are not permitted to be rolled over.  You must take the RMD for the year (and any RMD for the prior year), then you can roll over the remainder of the account.  You can only roll over to an IRA an IRA annuity or an annuity in a qualified retirement plan.  You are not permitted to roll over a nonqualified annuity to an IRA.

 

The distribution is reportable on the tax return in which you receive the distribution.  The payer is required to send you a Form 1099-R reporting the distribution(s) by the end of January following the year of the distribution.

 

If 2019 is the first year for which you must take an RMD from a qualified annuity but you have chosen to take this RMD in early 2020 by April 1, 2020 as you are permitted to do with your first RMD, both this RMD and your 2020 RMD will be reported on your 2020 tax return.  When 2019 TurboTax asks if you received all of your RMD for 2019, answer Yes; this question is not worded properly to take into account the first RMD being taken early the following year.