Why is TT applying a 25% penalty on an annuity when the full RMD has been taken? If I put the RMD to $0, the penalty goes away. Seems like a glitch in the programming.

[kristi-johnson]

This is my only annuity so not an issue with multiple RMDs across different investments.

[DanaB27]

Please review your entries. First you are asked about the RMD for the account and then you are asked how much of the distribution is applied towards the RMD.

Please follow these steps in TurboTax Online:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Enter the RMD amount for this account on the "Let's get more information about your Required Minimum Distribution (RMD)" screen
5. Continue until "How much of this distribution applied to your December 31, 2024 RMD?" screen and select "The entire distribution was an RMD"  /or select "Only part of this distribution was a RMD" and enter the amount of RMD
6. On the "Review your 1099-R info" screen click "Continue"
7. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD" if you met all of your RMD for 2024.

In TurboTax Desktop:

1. Click on "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R” and enter your 1099-R
3. On the "Required Minimum Distribution" screen enter RMD for this account 
4. On the "How much of This Distribution Applied to your December 31, 2024 RMD" select "The entire distribution applied…"  / or select "Some of this distribution…" and enter the RMD amount 
5. On the "Your 1099-R Entries" screen click "Continue"
6. On the "Did You Miss a Required Distribution From Any Retirement Accounts?" screen select "None of these plans failed to withdraw the RMD" if you met all of your RMD for 2024.