Waiver of RMDs

[SamS1]

Yes. The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, waives required minimum distributions during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020. 

The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020  taxes.

[bill18163]

So I'm guessing that I should enter in TT that I was not required to take a RMD for 2020?

[DaveF1006]

Yes, that is correct.

[cruisefor2]

Where exactly in TurboTax 2020 interview process does it ask if I am required to take RMD ??  Per CARES Act I did not take RMD...you would think there would be some type of waiver form in TurboTax.

[DawnC]

It will ask when you enter your 1099-R, but they (RMDs) were waived in 2020.  So, if you did not get a 1099-R, you don't have to do anything.   There is no RMD requirement for 2020.   If you did receive a 1099-R, but you returned the money, when you enter the 1099-R, say none of it was an RMD and then you will see the option to say you returned the money.   If you say it was an RMD, you won't see the option to say you returned the money.   @cruisefor2

[Cynthia D]

My dad is 89 and chose not to take his RMD’s in 2020.  However, he keeps all of the names, addresses of his various funds in TT under the section for 1099-R’s.  He was ready to file and the system keeps sending him back to review his 1099-R’s. There is no info in the 1099-R forms.  He has answered all of the following questions correctly.  Does he need to delete all of the 1099-R info from the previous years?  He was hoping not to do that, as he didn’t want to have to re-enter all of the info for tax year of 2021.  Any guidance or suggestions would be greatly appreciated.

[VolvoGirl]

Sorry he needs to delete them.

[Cynthia D]

Thanks!

[DanJ6669]

---

@DawnC wrote:

It will ask when you enter your 1099-R, but they (RMDs) were waived in 2020.  So, if you did not get a 1099-R, you don't have to do anything.   There is no RMD requirement for 2020.   If you did receive a 1099-R, but you returned the money, when you enter the 1099-R, say none of it was an RMD and then you will see the option to say you returned the money.   If you say it was an RMD, you won't see the option to say you returned the money.   @cruisefor2

---

What if you did receive a 1099-R for some (but not all) of the amount that you would have been required to take?  Turbotax asks "Was this withdrawal an RMD for 2020"?  The way it is worded, it is implied I am supposed to answer yes.  It will subsequently ask to tell more about the distribution. There is an option to say "I was not required to take an RMD for 2020."

So it's not clear if this is not considered an RMD because there was no REQUIRED Minimum Distribution, or whether it was an RMD, but the RMD wasn't required, or... ???

Thank you...

[VolvoGirl]

Answer NO not RMD.  

Since there is no RMD required for 2020, 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). Was any withholding taken out? If it was then did you replace the withholding with your own money? Otherwise the withholding will be a taxable distribution itself. You will get credit for the withholding taken out on 1040 line 25b.

If you already entered the 1099-R as RMD and changing your answer to the RMD question doesn't work then you have to delete and renter the 1099-R form.

[DanJ6669]

Thanks for the response...  there was no witholding taken out.  But, to be clear, I did not roll over the withdrawal  anywhere, or return it back into the account. I need to pay taxes on the amount withdrawn, but I just want to make sure everything else is filled out properly  so that it does not say that I owe money for not taking out the full amount, or fill out any other fields incorrectly. 

From what I can tell, answering that none of the money withdrawn was an RMD will yield the results that I believe I need, but I just wasn't sure... the wording of the questions are horrible...

[macuser_22]

If you kept the money then the RMD question is irrelevant how you answer it.    It's only purpose is to prevent rolling a RMD over.   Nothing about the question  or a RMD goes on a tax return at all - only the taxable distribution does.

[DanJ6669]

---

@macuser_22 wrote:

If you kept the money then the RMD question is irrelevant how you answer it.    It's only purpose is to prevent rolling a RMD over.   Nothing about the question  or a RMD goes on a tax return at all - only the taxable distribution does.

---

Thanks for the response, but as I said, there is one other aspect of the RMD goes on the return... if you do not take the full RMD, there is a 50% penalty in a normal year on the difference between what you withdrew vs. the RMD amount.  Depending on how I've answered these questions, I've seen form 5329 created that showed the 50% penalty. So TurboTax is not smart enough to know that there should not be any penalties this year.  But the RMD questions do matter.

[macuser_22]

---

@DanJ6669 wrote:

---

@macuser_22 wrote:

If you kept the money then the RMD question is irrelevant how you answer it.    It's only purpose is to prevent rolling a RMD over.   Nothing about the question  or a RMD goes on a tax return at all - only the taxable distribution does.

---

Thanks for the response, but as I said, there is one other aspect of the RMD goes on the return... if you do not take the full RMD, there is a 50% penalty in a normal year on the difference between what you withdrew vs. the RMD amount.  Depending on how I've answered these questions, I've seen form 5329 created that showed the 50% penalty. So TurboTax is not smart enough to know that there should not be any penalties this year.  But the RMD questions do matter.

---

Then you did not answer the 2nd RMD questions that assesses that penalty with "RMD not required".

[Sharon42]

I have the same question, but TT did not give me a chance to say “RMD not required” unless I just write it in a box where they ask me to explain why what I received from my retirement fund doesn‘t match my required RMD.  I wrote in the box that it was not required because of COVID.  Hope that works.