MRD & 401K contribution

[rbccaverly]

I am just about done with my state and federal 2020 taxes.  One question I have.

1.) My wife, 75 yrs, took her RMD for 2020 in February of 2020.  In April, we found out that we did not have to take our RMD's for this year due to Covid.  She did and we have a 1099R showing the amount and state and Fed. taxes withheld.  When she found out that we did not have to take our RMD's she took money from her savings account and put it back into her 401K acct to replace the RMD amount withdrawn.  The 1099 R is entered onto our tax forms and is OK.  My question is, the money she took from savings and deposited to her 401K account, can that be considered as an IRA contribution to her retirement account????

Yes or No.  If yes, where do you enter that figure?

Regards,

Bruce 

[MinhT1 · Accepted solution]

No. 

The repayment of RMDs is considered as a rollover and will be excluded from taxation. They are NOT new deductible contributions. The tax effect is the same as you do not have to pay tax on the amount of RMD repaid.

Enter your form 1099-R normally. After entering your form 1099-R, click Continue until you reach the screen Tell us if you moved the money through a rollover or conversion. Check the radio button which corresponds to your situation then click Continue and follow the interview. Enter the amount repaid as a rollover and it will be excluded from taxation. You will still have the credit for taxes withheld shown on your form 1099-R.