Under the CARES ACT, I returned my RMD in my IRA , technically a 2020 Rollover. But Turbo Tax is not allowing me to report the Federal Income tax withheld in Box 4 1099

[macuser_22]

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@retsin2000 wrote:

But we can't get to forms in the online version though, right?

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I've upgraded to the live version mostly to try to get an answer with how to do this. In fact this is the first year I've done online because I wanted the live help specifically for this issue as I anticipated it being weird. So far the live folks haven't been able to give me an answer. The latest guy I talked to was super friendly and understood the issue and has indicated he will have an answer but nothing yet.

I'm hoping if I have to go back to an installed software version that I won't have to pay for both that and online and for the help which has so far not been able to help (although I know they have tried and are trying.)

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If this was a RMD  that was rolled over you must say that it was NOT a RMD to get the questions because there was not 2020 RMD so it was not a RMD,

Also, inherited IRA's are not eligible for rollover except for 2020, so if inherited, answer that it was NOT inherited.

[Mike610]

I input my 1099-R for the RMD including box 4 tax withheld and then chose non-taxable and rolled over in the subsequent questions.  This worked, however, in the income summary, the full RMD is counted in total income although shown as non taxable.  Question:  won't this inflated income be used to determine eligibility for future relief packages such as Congress is working on now?  Appears that it would be better to not report the RMD out and back in transactions at all.  That would be the same as those who chose to time their RMD until after the CARES Act was passed and thus will have no RMD transactions for 2020 at all.

[DawnC]

I think you need to delete that 1099-R and re-enter it.  It doesn't sound like it is properly reported.  I am not sure what you mean when you say you chose ''non-taxable''.   You don't get to choose whether or not the distribution is taxable as TurboTax will use the information you enter to determine the taxable amount.   Enter the 1099-R exactly how you see it.   

Since RMDs were waived for 2020, no part of the distribution was actually an RMD even though it was taken with the intention of satisfying an RMD.  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.  TurboTax will include the entire gross amount on Form 1040 line 4a but exclude the amount rolled over from the amount on line 4b.  TurboTax will also include the word ROLLOVER next to the line.

If you did not substitute other funds for the amount withheld for taxes so as to complete the rollover of the entire gross amount of the distribution, the amount of the withholding remains distributed, not rolled over, and subject to tax; it's too late to complete a rollover of that portion of the distribution.  If the overall tax liability determined on your tax return is less than your total withholding, including the amount withheld from the IRA distribution, you'll get a tax refund.

Only the taxable amount on Line 4b is included in your income so only this amount will be factored into your income to determine eligibility for any future relief Congress provides.   If you returned all of the RMD, there is zero net tax effect, but the 1099-R has to be entered if you received it.   No one had an RMD requirement in 2020.  Some chose to keep them anyway (they are still taxed if you kept the RMD) and others returned them.   If 100% was returned, there is no tax.     The rollover question is not the same as the question regarding covid distributions that were repaid.    @Mike610

[macuser_22]

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@Mike610 wrote:

I input my 1099-R for the RMD including box 4 tax withheld and then chose non-taxable and rolled over in the subsequent questions.  This worked, however, in the income summary, the full RMD is counted in total income although shown as non taxable.  Question:  won't this inflated income be used to determine eligibility for future relief packages such as Congress is working on now?  Appears that it would be better to not report the RMD out and back in transactions at all.  That would be the same as those who chose to time their RMD until after the CARES Act was passed and thus will have no RMD transactions for 2020 at all.

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It will show as income on the summary screen which shows gross income, not taxable income.

The IRS requires reporting all income on a *income* tax return - taxable and not-taxable.

The income will be reported on line 4a (or 4c) and 4b (or 4d) on the 1040 form with the word “ROLLOVER” next to it if it was a rollover.

The taxable amount will go on the 1040 line 4b (or 4d). In the case of a rollover, nothing goes on 4b (or 4d).

[ExcessTurbo]

This still does not work correctly for me.  While TT makes line 4b zero and has the correct dollar amount in line 4a, it incorrectly adds the tax withheld to line 25b even though I indicated I retuned that money as well.

Delete 1099, save file close TT.  Reopen TT

Import 1099R

Shows me three documents that I have imported, click done

For some reason TT asks me about *other* imported item. (Answer None of these apply)

TT shows me 1099R of this subject – I click edit

Confirmation question  - I confirm Form 1099R and that it belongs to me. (Not my wife).

Shows me form values. Continue

I click continue

Did name (me) inherit the IRA from Brokerage.

If I click Click No  (as directed in this thread even though IRA IS inherited )

TT asks me when this person was born (Despite the fact that I said not inherited – Probably it knows inherited from code=4)).  Answer before July 1, 1948

Was this withdrawal an RMD   I click NO

What did you do with the money – select Moved to another retirement account(or returned it to the same retirement account?

Which of the following applies

Rolled over all of this money to another traditional IRA ….

We want you to let you know You wont have to pay tax on your $1,740.87 rollover from Brokerage

How much money did you actual deposit (they mean return)

We see that $539.67 was withheld from this distribution for taxes

Yes, Name added $539.67 to the $1,201.20 name got (total of $1,740.87)

Did name put this money from brokerage in a Health savings account - No

Was this withdrawal due to COVID 19 or a Qualified Disaster No

Value on line 25b is incorrect.

[macuser_22]

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@ExcessTurbo wrote:

This still does not work correctly for me.  While TT makes line 4b zero and has the correct dollar amount in line 4a, it incorrectly adds the tax withheld to line 25b even though I indicated I retuned that money as well.

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Line 25b is correct and should be the 1099-R box 4 amount.    You cannot change what was withheld and already sent to the IRS by the payer of the 1099-R by you returning that money.     The IRS already has the withholding so to get it back as a refund it must be on line 25 to be applied to all your taxable income.

[ExcessTurbo]

I returned to the brokerage all the money I received plus all the money that was withheld for federal and state taxes.   The brokerage gave me credit for the grand total.  The money allocated to withheld taxes is in my account.

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The only way the IRS  and state would have the "withheld" money is if the brokerage sent the money to them and did not debit my account.  That seems unlikely.

[macuser_22]

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@ExcessTurbo wrote:

I returned to the brokerage all the money I received plus all the money that was withheld for federal and state taxes.   The brokerage gave me credit for the grand total.  The money allocated to withheld taxes is in my account.

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The only way the IRS  and state would have the "withheld" money is if the brokerage sent the money to them and did not debit my account.  That seems unlikely.

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Unlikely?  Of course tax withheld was sent to the IRS (U.S. Treasure to be exact).    They do not "debit" your account, the IRA custodian has already  done that..    The money you received form the  distribution was the 1099-R amount minus the box 4 amount that was sent to the Gov.

If you rolled over the box 1 amount then you replaced the box 4 amount with other funds so now you are due a refund of that amount withheld.

If you only rolled over the amount you received (box 1 minus box 4), then the box 4 is still a refundable credit.

[ExcessTurbo]

1099R

Box 1 =$1,740.87

Box 2a = $1,740.87

Box 3 = $382.9

Box 14 = $156.68

My bank received $1,201.20 in January.

In August I wrote a check for $1,740.87 and sent it to the IRA custodian (That I refer to as Brokerage in my previous comments) .

My January statement shows a shows distribution in January of $1,740.87.

My August statement shows a contribution of $1,740.87.

All the withholding is back in the IRA account.  

Line 25b should not be modified by this 1099R 

[macuser_22]

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@ExcessTurbo wrote:

1099R

Box 1 =$1,740.87

Box 2a = $1,740.87

Box 3 = $382.9

Box 14 = $156.68

My bank received $1,201.20 in January.

In August I wrote a check for $1,740.87 and sent it to the IRA custodian (That I refer to as Brokerage in my previous comments) .

My January statement shows a shows distribution in January of $1,740.87.

My August statement shows a contribution of $1,740.87.

All the withholding is back in the IRA account.  

Line 25b should not be modified by this 1099R 

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Wrong - you fail to understand withholding.   (And I think you meant box 4 - not box 3.)

The "government"  has the box 4 withholding - you replaced it with other funds in the rollover  so now you get that withholding  *back*.    You rolled back the box 1 distribution amount  and *replaced* the withholding with other money so you get what was withheld back.

When you received the distribution, you did not get $1,704, you got about $1,201 after the $540 withholding.

[ExcessTurbo]

Yes, Box 4, not box 3.

[mikewinnick1]

I pay estimated taxes quarterly and I take my RMD fully in January. After eading all the suggestions on how to deal with putting back the RMD my situation was simplified because all my taxes come from me and not anyone else via withholding.

In June I transferred my RMD money back to my IRA (I use Fidelity). When I filed I noted that I took the RMD and put it back. My 1040 had the word 'ROLLOVER'  and my AGI did not have any RMD included. My return, other than some extra numbers on page one  essentially was as it would have been had I never even taken out the RMD.

The only issue was that since I had paid two quarterly estimated tax payments based on my taking the RMD I had fully paid my 2020 taxes by the 2nd payment. So I made no estimated payments in September and January. Of course the IRS had a few thousand extra dollars of mine that I was due back. But that was easy since I really didn't need the money. I just told them to apply the overage to my 2021 payments. If I asked for them to send it back to me I would have received it in March maybe and then have to send it back again on April15th as my first quarter payment. So now I can send in a bit less for the 2nd quarter payment too.

[macuser_22]

Estimated tax payments and 1099-R tax withholding are totally different and not related in any way.

1099-R box 4 withholding must go on the 1040 line 25b.

[ExcessTurbo]

macuser_22  Thank you for setting me straight.  I was way off track.

[rstupp]

Under the CARES ACT, I returned 100% the RMD back to my IRA, even though 10% was deducted for Federal taxes. Turbo Tax is showing the Tax amount as Income as well as withholding tax. Since I paid it all back, there should be -0- Income. It's as though, I never made any RMD but prepaid an amount for taxes. There should not be any income. Also, do I need to wait for the Form 5498 before I can file my taxes?