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Undoing an RMD in 2020 per Cares Act

We started our 2020 RMD distribution early in 2020, but the CARES Act obviated the necessity for doing so.  Our financial advisor returned the money back into our IRA,  less the state and federal tax withholding amounts (which could not be recouped).  According to online advisors, we are told to report the total amount of the RMD on line 4a and then put $0.0 on line 4b for "taxable amount" AND write the word "Rollover" in the margin.  TurboTax doe not appear to allow this there a way around it, short of filing a paper copy? Appreciate advice!

3 Replies
Level 15

Undoing an RMD in 2020 per Cares Act

Yes!  First delete any 1099-R that you might have been working on and start over with a new 1099. Now report the amounts just as you see on your form but tell the program that the distribution was NOT a RMD. Then you can report the amount rolled over which would be the amount distributed less the amount withheld. 

Level 15

Undoing an RMD in 2020 per Cares Act

Delete the 1099-R and re-enter it.    When the RMD question comes up answer "None of this distribution was a RMD" because is was not - there was no 2020 RMD at all.  The you should get the next screen to do the rollover.


(The ONLY reason for the RMD question is to prevent rolling over any part of a RMD that is normally not allowed, but in 2020 it was not a RMD in the first place.)



**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Level 15

Undoing an RMD in 2020 per Cares Act

Since there is no RMD required for 2020 then after you enter the 1099R say it was NOT an RMD and then that you rolled it over (even if back into the same account). It will show as income on the Turbo Tax Summary or Review so check the actual 1040. The amount should be on line 4a or 5a and say ROLLOVER by the taxable lines 4b or 5b. See my screen shots on this post,


But the withholding taken out will become a taxable distribution if you did not replace it from your own money.   So it will say Rollover by line 4b but there will be a taxable amount for the withholding that was distributed (even to the IRS & state).  You will still get credit for all the withholding.



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