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Level 3
posted Feb 26, 2021 9:05:46 PM

Returns rejected because TurboTax thinks Roth IRA conversion was an inherited IRA.

In the section for 1099-R entries, I clicked "no" to the question of whether my Roth IRA conversion distribution was inherited.  I also answered the question asking what I did with the money that I moved it to another retirement account, did a Roth conversion, and that the total amount was converted.  The review told me there were no errors. The email from TurboTax says my returns were rejected because "FED_Taxable_Inherited_IRA - There is a potential issue with the calculation of your Taxable Inherited IRA."  What happened, and how can I fix it?

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1 Best answer
Level 15
Feb 27, 2021 10:30:50 AM

It appears that all tax returns that include Form 8606 Part I are being intercepted while the developers fix a problem related to distributions from inherited IRAs.  I don't think it's meant to indicate that your tax return reports a distribution from an inherited IRA.

24 Replies
Level 3
Feb 26, 2021 9:55:32 PM

Sorry, can't answer your question. However, there are other threads on this same topic. You're not alone! You may want to watch those. 

Level 15
Feb 27, 2021 6:46:24 AM

It appears that TurboTax is REJECTING certain returns out of caution while they investigate various BUGs in TurboTax.

 

A really bad year for TurboTax.

Level 3
Feb 27, 2021 6:56:45 AM

Thanks.  I saw those other people who were having problems with their actual inherited IRAs and Form 8606.  Of course, I don't have an inherited IRA, although I did use 8606 to figure the taxable portion of my IRA conversion distribution.  Anyway, that would explain why I have nothing to fix.

Level 15
Feb 27, 2021 10:30:50 AM

It appears that all tax returns that include Form 8606 Part I are being intercepted while the developers fix a problem related to distributions from inherited IRAs.  I don't think it's meant to indicate that your tax return reports a distribution from an inherited IRA.

Level 3
Feb 27, 2021 11:20:00 AM

Thanks!  I guess we're all stuck until March 5--assuming it's really cleared up by then.

New Member
Mar 1, 2021 12:56:30 PM

It's March 1st.  Can someone at TurbotTax give us an update on the fix and if the March 5 date still holds?

New Member
Mar 1, 2021 1:06:07 PM

Seriously TurboTax, get it together: None of my IRAs are inherited, yet, my returns were rejected by the IRA and my state. What do I need to do to fix this? No errors were discovered prior to submittal. Please help.

Returning Member
Mar 1, 2021 1:10:17 PM

My return was rejected today due to a potential issue with taxable inherited IRA. I do not have an inherited IRA, but I did file form 8606 for myself and wife.  I too will have to wait until March  5 for the fix.  My only concern is that I paid my Federal tax owed as of today March 1.  I hope the IRS can keep track of my payment even though the final return will now be dalayed until March 5 or later.

New Member
Mar 3, 2021 2:18:53 PM

Been filing 8606 with turbotax for years and this is the first time I have had a problem. I never had an inherited IRA and hopefully the team at Intuit can get their act together and fix this. What an embarrassment for such a simple form. So now after it's fixed we have to refile again ? There should be compensation involved for those inconvenienced by this problem.

Level 15
Mar 3, 2021 2:27:57 PM

A rejected tax return has not been filed.  You'll have to attempt filing again.

New Member
Mar 3, 2021 3:33:55 PM

Print the return animal it in. 

New Member
Mar 4, 2021 1:49:55 PM

I had the same thing happen.  System appears to think my conversion of IRA to RothIRA (full amount), was inherited.   Does anyone have a fix for this yet?

Returning Member
Mar 4, 2021 2:05:16 PM

Agreed, Turbo Tax should have given provided more information. Everyone is scrambling to see if they checked Inherited IRA by accident, etc. I didn't have any inherited but did have an 8606. I'm a long time user but may look around for a new software provider next year. 

Returning Member
Mar 5, 2021 5:27:13 AM

I updated TT, deleted 1099-R forms and reentered 1099-R information, final review and refiled again. It was accepted by IRS.

Returning Member
Mar 5, 2021 7:07:37 AM

My return was rejected because Turbo Tax thinks IRA conversion was an inherited IRA

Intuit Alumni
Mar 5, 2021 12:23:32 PM

The error/rejection you are experiencing is connected with entries on Form 8606. Please see this link to sign up for updates related to this issue: Why Am I Getting a "Check This Entry" Error Related to For 8606? Once the issue is resolved you will be notified and will be able to resubmit your tax return.

@TaxStat-1

Returning Member
Mar 5, 2021 1:02:49 PM

I just tried the same sequence - my return was now accepted!

New Member
Mar 5, 2021 4:46:54 PM

What do you mean same sequence?

 

Mine was rejected after a conversion as well. What do I need to do before I refile?

 

thanks!

Level 15
Mar 5, 2021 4:49:31 PM

If you are using the CD/download version of TurboTax, make sure that you have updated to the version released yesterday, then, with either the CD/download or online version, just refile.

New Member
Mar 6, 2021 9:16:47 AM

The fix is in (so to speak).  I opened TT first thing in the morning (Friday, 5 March), got the updates, went to the Income Section, deleted the 1099-R in question, re-downloaded the form from my brokerage account and resubmitted my Federal and State tax returns.  Both were accepted within a couple of hours.

Level 1
Mar 8, 2021 7:20:31 AM

I get an "access denied" message when I click on this link.

Returning Member
Mar 24, 2021 11:34:04 AM

how do i fix this prob

Returning Member
Mar 24, 2021 12:43:03 PM

was this problem taken care of I need to fix this. or is it done. 

New Member
Mar 24, 2021 12:55:11 PM

Software update was applied 5 March.  Launch TT, accept updates and then go to the Income Section with the Roth IRA.  Delete what you currently have entered and then do that section again.  That worked for me and others that reported this problem in Jan-Feb.