CARES act 401k withdrawal / indirect IRA rollover

[brf]

I answered yes to RMD. I received a message at end of easy step that the distribution wasn't taxable but it showed up on line 5B on 1040

[macuser_22]

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@brf  wrote:

I answered yes to RMD. I received a message at end of easy step that the distribution wasn't taxable but it showed up on line 5B on 1040

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That is the problem.   RMD's cannot be rolled over, however there was NO RMD at all for 2020 so for it to work right, you must check the box that "None of this distribution was a RMD" because it was not a RMD.

The wording on the screen is very unclear and mis-leading.

[VolvoGirl]

The message at the end was probably saying there is no penalty.  You have to answer NO it is NOT an RMD (since no RMD are required for 2020).  Then it will let you say you rolled it over/back into the same account or another account.  Completely delete the 1099R and try entering it again from the beginning.

ps........

If you edit or review a 1099R it does not keep your answers from before but resets them to the defaults. Then you have to go through and answer them all again.   So be sure to go all the way to the end of the 1099R section.  They are right unless you go back.

[brf]

That solved the problem. Thanks.

[Edward Westmeyer]

I took RMD from my 401K and from my IRA early in the year before Covid. After the IRS said RMD are not required I repaid them. I also converted some of my IRA to my Roth IRA in a separate transaction. When I put the infor into Turbo tax it ask me what I did with the money I took in the RMD. The Codes I thought I could use where N or 8. Which one should I use? They both gave me the correct answer. Thank you

[VolvoGirl]

No!  Wait to get the 1099Rs.  Don't enter without them.  You can't know what will be in all the boxes.  

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.

[macuser_22]

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@Edward Westmeyer wrote:

I took RMD from my 401K and from my IRA early in the year before Covid. After the IRS said RMD are not required I repaid them. I also converted some of my IRA to my Roth IRA in a separate transaction. When I put the infor into Turbo tax it ask me what I did with the money I took in the RMD. The Codes I thought I could use where N or 8. Which one should I use? They both gave me the correct answer. Thank you

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Codes N or 8 are both wrong for this type of transaction.    The IRS will not even open until Feb 12 and you should receive the 1099-R with the actual codes to use by Jan 31.

[Edward Westmeyer]

I got my 1099-R one from my 401K and one from my IRA. In box 7 they both said 7 in box 7. The 401K amount was repaid into the IRA and the Ira amount was repaid to that same IRA. Later a second large amount was transfered from my IRA to my Roth IRA by the trustee. 

[DavidD66]

@taxesarefun4 Your 401(k) withdrawal is not a taxable event, based upon your description of what occurred.  You will have to report the withdrawal on your tax return.  You should receive a Form 1099-R from your 401(k) trustee.  After you enter the 1099-R, there is a page that asks "What Did You Do With The Money From [Retirement Plan]"? 

Be sure you indicate that you "rolled over all of this money to an IRA or other retirement account (or returned it to the same account)."   Answering these questions correctly will result in your distribution showing up as non-taxable.

[macuser_22]

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@Edward Westmeyer wrote:

...the Ira amount was repaid to that same IRA. Later a second large amount was transfered from my IRA to my Roth IRA by the trustee. 

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Are you saying that you took two distributions from the IRA, the first that was rolled back to the IRA and the second a distribution that was converted to a Roth?

If that was the case then that is a situation that TurboTax does not support on a single 1099-R that has two different destinations (rollover for one and Roth conversion for the other).  The 1099-R would have to be entered as two 1099-R's, one with the rollover only and one with the conversion amount.    The total of both box 1 amounts would equal the amount on the actual 1099-R.

[eddy31]

i was told that we had until august 31, 2020 to make this ta qualfied rollover

[macuser_22]

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@eddy31 wrote:

i was told that we had until august 31, 2020 to make this ta qualfied rollover

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Correct.   The cut-off date to complete a rollover of a 2020 RMD was extended to August 31, 2020.

Do you have a question about it or having a problem?