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New Member
posted Apr 16, 2023 4:56:17 PM

The return treats my IRA distribution as "early" even though I'm 61. What can I do to fix that and avoid associated penalties?

0 11 1689
11 Replies
Level 15
Apr 16, 2023 4:57:20 PM

What is the code in box 7?

New Member
Apr 16, 2023 4:59:30 PM

Q

Level 15
Apr 16, 2023 5:06:43 PM

Q—Qualified distribution from a Roth IRA

 

This has nothing to do with an early distribution and since you are older than 59 1/2 there are no early distribution penalties.

Where are you seeing this being regarded as an early distribution?

Level 15
Apr 16, 2023 5:10:09 PM

You did check the box for IRA/SEP/SIMPLE correct?

 

@dmertz 

New Member
Apr 16, 2023 5:16:43 PM

Here: 

New Member
Apr 16, 2023 5:18:18 PM

No, it wasn't checked on my 1099-R. Is that all i need? Awesome!

Level 15
Apr 16, 2023 5:34:08 PM

TurboTax never treats code Q as an early distribution or in any way taxable.  There is no way to cause TurboTax to treat code Q as an early distribution.  Marking the IRA/SEP/SIMPLE box on a code-Q Form 1099-R is unnecessary, never done by the payer and has no effect.

New Member
Apr 16, 2023 5:46:48 PM

So what else could it be?

Level 15
Apr 16, 2023 6:18:19 PM

What are you seeing that makes you think that the distribution in being treated as an early distribution?

New Member
Apr 16, 2023 6:39:06 PM

This:

Level 15
Apr 17, 2023 5:42:21 AM

It would seem that this is coming from some other Form 1099-R.  The only one that would make sense is if you had one for a return of a Roth IRA contribution and the Form 1099-R had taxable gains shown in box 2a.  Such a Form 1099-R includes code J in box 7 to indicate that it's from a Roth IRA, regardless of your age, and you would have to claim an Other reason exception to the early distribution penalty on this distribution.  Someone over age 59½ at the time of the distribution can always claim this Other reason exception.

 

I suggest looking at Form 5329 to see exactly what amount is being subjected to an early-distribution penalty and correlate that with a particular Form 1099-R.  Forms 1099-R with code 1 or code J are the only codes that indicate an early-distribution that would trigger that message from TurboTax.  If any other Form 1099-R is triggering the message.