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Level 1
posted Jan 20, 2021 5:42:52 AM

Reversed a RMD due to Cares Act but still showing it as taxable

After withdrawing my 2020 RMD the CARES Act allowed me to roll it back into the same account with no tax consequences.  TT confirmed "you won't have to pay tax on your $10,000 rollover....." yet the Form 1040 is showing the $10,000 as income and taxable!  How can I get this corrected?  Many thanks.

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2 Replies
Expert Alumni
Jan 20, 2021 6:34:50 AM

Please be sure you indicate that the withdrawal was "rolled over"  to the same account.

 

  1. A few screens after the 1099-R input screen, you should see a screen asking if you rolled over all of the distribution to another retirement account.
  2. Mark the radio button that you rolled over $XX to an IRA or other retirement account (or returned it to the same account).
  3. If you are using the desktop version of TurboTax, the screen will say What did you do with the money from this payer?  Mark the button that you moved the money to another retirement account.
  4. Below the grey line, click the radio button next to rolled over all of this money.

The amount of the original withdrawal will show on your 1040, line5a., as a distribution, but line 5b will show 0 as the taxable amount, with ROLLOVER noted.  See screenshot below:

 

 

Level 1
Jan 20, 2021 6:41:24 AM

Thanks so much Irene.  Someone else on the forum suggested not to indicate the distribution as a RMD.  I tried that and it worked...the TT entry then showed as you displayed and thus not taxable income.  Thanks again.