Took 2020 RMD before RMD's for 2020 waived. Repaid RMD. Answered TTax questions and Box B1 on worksheet checked but RMD amount still shows as income on my 1040. Why?

[macuser_22]

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@stockjohn wrote:

This was the answer I was looking for.  Thank  you.  However, the program should have had this information instead of making us search for it.

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I doubt that they will make any software changes at this late date since this is a "one time" event for 2020 only and only affects a few taxpayer that had a distribution from an inherited IRA, that was a RMD, and they rolled it back.

[rhugg3]

Your solution is correct and worked perfectly.  My return was correct, filed yesterday, and accepted.  Today March 26, 2020, I wanted to check on something on the return.  I started up TTax. It required updates.  After today's updates, even though the rollover box is checked as before, and rollover is printed next to 4b, it now shows the full amount as income.  Nice BUG!!

[DawnC]

Did the update change what you e-filed yesterday?   @rhugg3    I don't see your username in this thread, so I am not sure what you are referencing since this thread has multiple users with different issues.   But if you can provide some more details regarding your distribution, someone will be able to help, if needed.   Did you return an RMD and e-file your return with 0 taxable income?   And are you saying that after the update, your taxable income (and tax liability) has increased?  

[rhugg3]

Hi DawnC,

Yes it changed what I filed yesterday.  I returned an RMD, but did not check or enter anything under the RMD Section on 1099-R.  I had the box checked for inherited IRA from "someone other than spouse" and the box checked for "entire distribution rolled over".  Everything worked fine.  "rollover" printed on 1040SR line  4b and 0 for the amount.  Today after the updates, the full amount of the distribution was listed on line 2b as taxable.  ALSO,  the program now has me filing a 1040 and not the 1040SR that I actually filed.  Only thing that changed was the program.  I made no changes to my database.

[chuckegunn]

In February or earlier in March I completed the forms as you say in your answer. When I went back into TT on March 28, 2021, to correct a completely different 1099 that had been amended, I did an update.  After the update when I opened the file, I noticed that my tax liability changed. On Form 1040 line 4b. still said "ROLLOVER" but in the last column the amount was the original RMD. It should have been (and was prior to the update) zero.

I tried updating and answered the first Cares Act question "no" as you indicated in your answer. But this time no screen came up to answer how much I rolled over.

In addition, after I tried to edit the information, the word "ROLLOVER" disappeared.

I tried telephone support with no success. 

[chuckegunn]

After posting the above, I followed the thread and changed the answer to the "Inherited question" as you suggested to another member. It did correct the return and the 1040 is now showing the right amounts.

But the update DID change the program. Before the update you could answer the question "Yes" that it was an Inherited IRA. It then, as in prior years, asked the first name and year of death of the person who you inherited the IRA from.It does not ask that question anymore. If you answer "NO" it still asks those questions.

 Ironically, it still asks when the deceased was born.

I agree this is a Bug

[annelouise]

In TurboTax, indicate that the distribution was not an RMD.  Indicate that you moved the money to another retirement account (or returned it to the same account), then indicate how much of the distribution you returned to the IRA.  

I did the first thing and said the distribution was not an RMD.  Where do I indicate that I returned the money to the same account?  I have gone through this multiple times and I cannot figure it out.

[annelouise]

The same thing happened to me.  After reading this thread, I was able to fix it.  Definitely not intuitive!

[macuser_22]

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@annelouise wrote:

In TurboTax, indicate that the distribution was not an RMD.  Indicate that you moved the money to another retirement account (or returned it to the same account), then indicate how much of the distribution you returned to the IRA.  

I did the first thing and said the distribution was not an RMD.  Where do I indicate that I returned the money to the same account?  I have gone through this multiple times and I cannot figure it out.

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What code is in box 7 on your 1099-R?

Is the IRA/SEP/SIMPLE box checked?

Delete the 1099-R you entered and re-enter.

Answer the RMD question that "None of this distribution was a RMD" or "RMD not required" depending on the TurboTax version - because it was NOT a RMD, there were no 2020 RMD's.

If this is an inherited IRA then answer the "Is this IRA inherited" with NO. The purpose of that question is to PREVENT rolling an inherited IRA over, but is allowed for 2020 only.

Then you will get the screen to say it was "moved" and all rolled over.

Also check the box that this was NOT a COVID related distributions - it was a RMD that was returned.

That will put the 1099-R box 1 amount on the 1040 form line 4a with the word ROLLOVER next to it.

[annelouise]

Thank you very much.  The problem was the "was the IRA inherited" question.  Once I checked no, everything worked fine.

[lrwolfanger]

Where do I enter the amount returned?

[ReneeM7122]

This thread will explain how to back out the RMD in TurboTax and enter the amount that was returned.

Here is a TurboTax article about RMDs.

@lrwolfanger

[Anonymous]

Thanks for the help. This fixed the problem.

Turbo tax need to fix this bug in the software.

[Anonymous]

I agree, I thought I had the Inherited IRA correct before the software update.

The update changed several items.

I guess I better file my taxes before any more "improvements" are made.