Help: Can't enter a nondeductible traditional IRA contribution

[blackcoffeegaosoline]

I followed all the steps but never get to step 11. 

1. Sign in to your TurboTax account
2. Open your return if it’s not already open
3. Select Federal from the menu, then Deductions & Credits
4. Locate the Retirement and Investments section and select Show more
5. Select Start or Revisit next to Traditional and Roth IRA Contributions
6. Check the Traditional IRA box and select Continue
7. Answer Yes to the question, Did you Contribute To a Traditional IRA?
8. Answer No to the question, Is This a Repayment of a Retirement Distribution?
9. On the screen, Tell Us How Much You Contributed, enter the amount contributed and select Continue
10. Answer No on the screen Did You Change Your Mind?, then answer the questions on the following screens.
11. When you reach the Choose Not to Deduct IRA Contributions screen, select Yes, make part of my IRA contribution nondeductible, enter the amount you contributed, then select Continue. If none of your contribution can be deducted, you won't see the option to make part of it nondeductible. Instead, the full amount of your contribution will automatically be nondeductible

After Step 10, I get a page saying

Your IRA Contribution Isn't Permitted

Traditional IRAs offer some great benefits, but they have restrictions too.

XXXX is not permitted to contribute more than the amount of your earned income. Learn More

Your traditional IRA contribution of $30,000 is more than your earned income of zero. The difference of $30,000 is considered an excess contribution. What can I do?

and goes on to tell me I have a penalty.

My situation is this. I left my job in 2016, and had a traditional 401k, but recently learned about the Roth conversion.

So, in Feb of 2022 I took my traditional 401k and transferred it into a rollover then in March of 2022 converted it to a Roth. About 30000 total. (from TIAA account to Schwab)

Schwab sent me the 1099-R. I put all the information into my income on Turbo Tax, but in Turbo tax it says that I must also go through steps 1-11 above, but it won't let me. 

I wonder if this is because I did not contribute any money to the IRA in 2022? So confused. 

I did fill out all the info on the 1099-R (in the income and wages section and it does ask me in there if I converted the funds). I'm so confused because on TurboTax information it says it's a two step process and while I can fill out the 1099-R section in Wages it will not let me complete the section in Deductions (for steps 1-11 above). 

My AGI this year is 0, fyi. And I've contributed nothing to any 401k or Roth this year aside from the Rollover/ Conversion. 

[dmertz · Accepted solution]

You made no traditional IRA contribution.  Don't enter one; remove the traditional IRA contribution entry that you described in steps 1 through 11.  You can do that most easily by simply deleting the IRA Contribution Worksheet in TurboTax.

Enter the Form 1099-R from TIAA for the rollover from the 401(k) to the traditional IRA.  If this Form 1099-R has code G, answer No to both questions asking if this was a rollover to some kind of Roth account.  If the code on this Form 1099-R was instead code 1, 2 or 7, indicate that you moved the money to another retirement account and indicate the amount that you rolled over to the traditional IRA.

Enter the Form 1099-R from Schwab for the Roth conversion.  Indicate that you moved the money to another retirement account, that you did a combination of rolling over converting and cashing out, then indicate the amount that you converted to Roth.  The taxable amount of the Roth conversion will be calculated by TurboTax on Form 8606 Part II and will be included on Form 1040 line 4b.