Why does TurboTax assign a portion of a Roth IRA distribution as taxable for a person over the age of 59.5 from an account that has been open more than 5 years?

[mkmoore588]

I've found nothing in IRS Pub. 590-B that identifies any circumstances under which there is tax due on a Roth IRA distribution under the above circumstances. See Figure 2-1 in particular.

[NCperson]

@mkmoore588 it should not be taxable.  what code is in Box 7? 

Did you move the money to the current Bank within the last 5 years? if so, the bank would not know you meet the condition of having a Roth open for at least 5 years.  Delete the 1099-R and re-enter, following the questions very closely.  Is the code in box 7 a "J"?

[dmertz · Accepted solution]

Make sure to continue past the page that lists the Forms 1099-R that you have entered and, when asked by 2025 TurboTax, indicate that you had a Roth IRA before 2021.  Doing so will cause TurboTax to treat code T the same as code Q, indicating that the distribution is a qualified, nontaxable distribution, so that it is not included on Form 8606 Part III or on Form 1040 line 4b.