Retuned RMD exemption is showing as additional income

[tonicarneiro123]

I returned my RMD due to the exemption for 2020 within the time allotted showing it as a rollover when asked  by Turbo Tax what I did with my money. I then later in the year took out a lower amount from my IRA for living expenses. But now my income is showing both items, the original which was returned and the latter amount I took out.  It should only count the latter one as income. Has anyone run into the same problem? 

[DanaB27 · Accepted solution]

Please follow these steps to enter your 1099-R and RMD rollover (return of money):

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R”
4. Continue until "How much was a RMD?" and select "none"
5. Continue "Tell us if you moved the money through a rollover or conversion" and select "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)"
6. Continue answering the questions.

RMDs were waived for 2020 and you must indicate to TurboTax that none of the distribution was RMD. If you already enter the 1099-R as RMD and changing your answer to the RMD question doesn't work then you have to delete and renter the 1099-R form. 

You can verify your entry by looking at your Form 1040 line 4 or 5:

1. Click on "Tax Tools" in the left menu
2. Click "Tools"
3. Click "View Tax Summary" in the Tool Center window
4. Click on "Preview my 1040" on the left

[dmertz]

It's income in the sense that it must be reported on your tax return, but if entered as DanaB27 described it will be excluded from your taxable income.

[haroldbyers854]

I have followed the instructions, including deleting two 1099-R forms and adding two new 1099-R's. Still the the returned RMD's are included in taxable income on line 5b of the 1040 form. Is there another solution?

[DawnC]

Did you say that the distributions were RMDs?   You have to say no when it asks you if the distributions were RMDs - and if it was from an inherited IRA, do not mark that box.  You may have to delete them again and re-enter them saying NO to the RMD question and not checking the inherited IRA box.   Then indicate that you put the money back.   Since RMDs were waived, these distributions were not really RMDs - and if you mark inherited IRA, you won't get the option to indicate that you returned the money.   @haroldbyers854

[haroldbyers854]

Thank you so much for your response. I now have the correct results.

Your help is much appreciated!