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Returning Member
posted Feb 27, 2022 9:27:13 AM

RMD missed in 2021 when rolling over

In 2021 I rolled over 100% of an IRA  and did not take an RMD even though I am required to do so. When reporting the event in Turbo Tax, the program asked if I took an RMD, acknowledged that I may be subject to tax/penalty, asked a few more special event questions, none of which applied, but then mysteriously said In am not subject to penalty or tax for not taking the RMD. How can this be true? Can I rely on that? No explanation was given.

0 2 548
2 Replies
Expert Alumni
Feb 27, 2022 11:12:10 AM

Yes, if you do not take your RMD and do not apply for a waiver then you will owe the 50% penalty calculated on Form 5329.

 

Please review your answers when you go through the retirement section interview:

 

  1. Click on "Search" on the top right and type “1099-R”
  2. Click on “Jump to 1099-R”
  3. Click "Continue" and enter the information from your 1099-R
  4. On the "Your 1099-R Entries" screen click "Continue"
  5. Continue until "Tell us more about the retirement plan distribution" screen and select "I did not receive all the RMD for 2021" and click "Continue"
  6. On the "Required Minimum Distribution" screen enter the RMD amount and actual amount received
  7. Enter information on the "Let's see if we can reduce your tax bill" if you want to apply for a waiver.

Level 15
Mar 1, 2022 10:03:28 AM

The reply provided by @DanaB27 applies to the case where you did a nonreportable trustee-to-trustee transfer from one IRA to another (not a rollover).

 

However, if you instead did a distribution and rollover from an IRA and that was reported on a Form 1099-R, the answer is different.  In the case of a distribution and rollover, the distribution included the RMD so the RMD was satisfied, but the deposit of that RMD amount into another qualified plan constituted an excess regular contribution to the extent that it exceeded the amount permitted as a regular contribution.