Will inherited IRA RMA's effect retirement savings contribution credit?

[guy0936]

I receive an RMA from an inherited IRA but I also made a 2018 contribution to a traditional IRA.  Does the RMA, even though it is from an inherited IRA, disqualify me from receiving the retirement savings contribution credit for 2018?   

[dmertz · Accepted solution]

If you are a non-spouse beneficiary, the distributions from the inherited IRA have no effect on your eligibility for the Retirement Savings Contributions Credit and you should not enter them when TurboTax asks if you received any distribution in the 2 years prior to the current tax year, the current tax year or the subsequent tax year through the due date of your current year tax return.

[guy0936]

TurboTax needs to amend their instructions about entering IRA distributions as they relate to the Retirement Savings Contribution Credit so as not to include RMD’s from inherited IRA’s. I see no mention of this in the instructions or help.

[dmertz]

The information provided in the On Demand Tax Guidance obtained when you click the Learn More link on this page states this.

[guy0936]

Thanks. I will take a look at that. BTW - Do you know anything about how to handle a Sch K-1 PTP that dissolves by converting all assets to stock in a new Corp? I asked this question a  week ago & have received no responses.

[dmertz]

I can't help with the K-1 situation.

[guy0936]

Thanks for responding!

[PR123]

Does this apply to Life Insurance distributions as well?

[AmyC]

@PR123 Life insurance generally is not related to your tax return unless you are maybe paying interest. What is your question?