Where to account for money returned to an IRA under the CARES Act

[coljediv]

From one of my IRAs in 2020, I initially took a lump sum of $48000.  Later in the year, prior to the deadline, I returned $5000 to the IRA.  On my 1099-R from the institution, it shows $48,000.  From the same institution I received a 5498 showing a $5000 rollover contribution.  How do I account for that in TurboTax.  I have tried putting it in an IRA contribution, but it doesn't do the right thing for the situation and says I will have an excess contribution.  The intended result is to have taxable IRA distribution of $43000.  How to make that happen in TurboTax?

[DanaB27]

Please, remove the $5,000 from the contribution section:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “IRA contributions”
3. Click on “Jump to IRA contributions” and you should see the “Traditional IRA and Roth IRA” screen.

The return of money will be entered in the 1099-R section, after you entered the 1099-R TurboTax will ask you if you rolled over some of the money. Here you are able to enter the amount your paid back.

1. Click on the Search box on the top and type “1099-R”
2. Click on “Jump to 1099-R” and you should see the “Your 1099-R Entries” screen and click "edit" next to the 1099-R

Please be aware that the question in regards to Coronavirus-related withdraws are not ready yet since the Form 8915-E, that reports the Coronavirus-related relief measures for retirement plan distributions, has not yet been finalized by the IRS. Therefore, the questions in regards to this relief are currently not available in the 1099-R section.

No date has been given by the IRS for the finalization of this document. TurboTax will update this section after the IRS releases the final version of form 8915-E and its instructions.

For additional information see: IRS Coronavirus-related relief for retirement plans and IRAs

[dmertz]

If the $5,000 was rolled over by the 60th day following the date of the distribution or if the distribution occurred after January 31, 2020 and the rollover was completed by July 15, 2020, there is no need to report this as a Coronavirus-Related Distribution (CRD) on Form 8915-E, unless an ordinary rollover would cause a violation of the one-rollover-per-12-months limitation.

To report an ordinary rollover, enter the Form 1099-R as received, indicate, if asked, that none of the distribution was RMD, indicate that you moved the money to another retirement account or returned it to the same account, indicate that you did a combination of rolling over, converting and cashing out, then enter $5,000 as the amount rolled over.  TurboTax will include the gross amount of $48,000 on Form 1040 line 4a, the taxable amount of $43,000 on line 4b and will include the word ROLLOVER next to the line.  If TurboTax does not ask what you did with the money, delete and reenter the Form 1099-R, answering the follow-up questions as I have indicated.

If this cannot be treated as an ordinary rollover,  you'll have to report it as a CRD and $5,000 repayment on Form 8915-E, but that's permitted only if you were qualified to receive a CRD.