2020 RMD tax free rollover (CARES)

[Grec]

I got my RMD (tax withheld) in Jan 2020,  and did tax-free rollover in July 2020.  This year I got 1099R document and form 5498 showing the rollover distribution.

I entered the Gross distribution and Withheld tax in the Form 1099-R, box 1 and 4. Form 5498 is not part of the tax returns

Since form 5498 is not a part of tax return, please, how/where do I show I did the tax-free rollover amount = RMD- Withheld tax? (I thought, due  CARES 2020 RMD waiver my income would be reduced.)  

[VolvoGirl · Accepted solution]

Since there is no RMD required for 2020,  after you enter the 1099R say it was NOT an RMD and then that you rolled it over (even if back into the same account).  Was any withholding taken out?  If it was then did you replace the withholding with your own money?  Otherwise the withholding will be a taxable distribution itself. You will get credit for the withholding taken out. 

If you already entered the 1099-R as RMD and changing your answer to the RMD question doesn't work then you have to delete and renter the 1099-R form. 

[Grec]

Thank you for such a speedy response.

I deleted the R1099 and started a new one. 

In the lower part, I did the following:

1. In the  RMD section 3rd line 'the amount of gross distbn is the RMD', I entered Zero

2. In the Rollover section, line B2 'if only part was rolled over, enter the amount of the partial rollover', I entered the amount = gross distbn - withheld tax (the withheld tax was not replaced with my own money).

The federal and state tax due is the same as before the deletion of the first R1099.

Please, what am I missing?

[VolvoGirl · Accepted solution]

No.  Do not enter anything about RMD.  Delete and start it over.  Enter the 1099R exactly as the form shows.    Then when it asks if it was the RMD say NO! It was not a RMD.

[VolvoGirl]

And If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 form and make sure it's right.

If you rolled it over it should say Rollover to the left of the taxable amount on 4b or 5b.   

[Grec]

Thank you very much for your, again prompt, response.

I understand the whole logic of your explanation. 

But I see no direct question to check/ write option NO  for RMD. The only option is to leave it blank and/or write 0  for full and partial RMD resp. If I do so or not,1040SR  always shows the RMD as a taxable income.

Could it be please, because of 1040SR e.i. we are over 701/2 years?

[VolvoGirl]

What code is in box 7?  I'll page someone who knows more.  @dmertz 

[dmertz]

I'll reply after knowing what code is in box 7 and whether or not the IRA/SEP/SIMPLE box is marked.

[Grec]

Good morning and thank you.

Yes,

1st code is 7 and next to it, the box IRA checked. 

[dmertz]

1. Delete the 1099-R form from TurboTax
2. Reenter the Form 1099-R manually exactly as received.
3. Indicate that none of the distribution was RMD
4. Indicate that you moved the money to another retirement account or returned it to the same account
5. Indicate that amount rolled over.
6. Observe that this amount is excluded from the taxable amount on From 1040 line 4b and the the word ROLLOVER appears next to the line.

[Grec]

Thank you for your help.

I understand the logic of steps 1-6.

But I am lost in where exactly to indicate 3,4, and 5.

1.     In 1099R, below boxes 1-19:

After three sections (Inherited IRA, Insurance, and Qualified Charitable Distbn)

 in the fourth section called RMD and with 3lines, I see no place to indicate NO RMD and money move to another IRA account.

2.      In Additional Distbn Info, further down: 

The Tax-free Rollover Amount to another IRA account was  equal to Gross Distbn less Withheld Tax,

I'm not sure whether to check B1 or

fill the rollover amount number into line B2.

[dmertz]

Grec, do not make entries in forms mode.  Delete the 1099-R and enter in step-by-step mode as I described.

[Grec]

DMertz,

thank you

I deleted the 1099R, and did indicate the  4-5 steps in the Step by Step Mode.

BUT  the 1040R, lines 4a  and 4b still show the same amount e.i. no rollover exclusion.

I repeated the steps few times with the same result.

Alena

[Grec]

DMertz,

Please, disregard my last message. Finally, on the 1099R the word tax-free rollover appeared (by adding the detailed explanation to 4b)

THANK YOU.