Direct Roll Over from Traditional IRA to Qualified Plan treated like income

TurboTax will show the rollover amount as 'income' on some summary screens as you go through the rest of your return.  Those summary screens are not used in any calculations to determine your eligibility for other credits or deductions. 

Eligibility for credits and deductions is based on information reported on the tax return itself.  As you indicated in your question, the rollover is being reported correctly on your actual tax return, so it should not be affecting any other credits or deductions.

Thanks for your reply.  I'll dig into the return to find/understand the big difference from last year's return.  Suggest TurboTax footnote the summary screens making it clear that those rollover actions aren't being included in the  credits/deductions calculations.  Such a clarification would have kept me from going into that rabbit hole.  Thanks and stay safe.

I have the same issue.    It shows in 4c on my 1040.  Should it be there as income?

Yes, A rollover will appear on line 4c,but it should not appear in 4d, which is the taxable amount.

My problem is different.  I took out $200,000 from an IRA account at TIAA.  An additional $66,667 was withheld as state and federal taxes.  A week later I returned $200,000 to the IRA account.  The 1099-R that I received to file my 2019 taxes showed the full amount of $266,667 as a gross distribution.  I have determined that the $200,000 that I rolled back into the IRA is not taxed because I have 60 days to do so.  How do I show the $200,00 as a rollover in Turbotax?

After you enter the 1099-R it will ask.

• "What did you do with the money from this payer".
• The answer is "Taxpayer moved the money to another retirement account".
• A drop down will appear
• Select "Taxpayer did a combination of rolling over, converting or cashing out the money.".
• Another drop down
• You rolled $200,000 back to the same account

You will owe tax on the $66K and possibly a 10% penalty if you're not 59 1/2

I did not find the question "What did you do with the money from this payer."

The problem seems to be with Box 7. TIAA placed the code number 7 in that box indicating a normal distribution.  I looked at other choices in the drop down and code "G" seems to be the proper code for my situation.  When I inserted a G the amount of refund changed that seemed correct.  Should I contact TIAA and ask them to issue me a new 1099-R? Or can I make the change myself?  I will be filing electronically.

Code 7 is right.  G is only for a direct transfer from the plan to the new plan and would be wrong.  Delete the 1099R and re enter it.  You must have missed something.  It should ask you what you did with it.  @dmertz 

JohnB5677's most recent post above provides the details needed to correctly enter this code 7 Form 1099-R and have TurboTax treat it as a nontaxable rollover.  Ignore TurboTax's income summary and look at Form 1040 lines 4b and 4d to see that it is not being included in taxable income and that the "ROLLOVER" notation is present.

I did what JohnB5677 said.  Now Turbotax says that the $200,000 rollover is excess contribution and is assessing $12,000 penalty. 

I went back to edit the 1099-R and the question about rollover is gone.

Excess contribution means you must have also entered it under Deductions as a new contribution.  It is not a new ira contribution.  Delete it from Deductions.  Only enter the 1099R.

If you are seeing a penalty, you have entered this under Deductions & Credits.  You need to delete that entry.  You can do so by deleting the IRA Contribution Worksheet. 

For Form 1099-R with code 7 in box 7, TurboTax will always present the question asking what you did with the money unless box 7 also includes code D or you indicate that the entire amount was RMD.  Delete the Form 1099-R and try again, making sure to read and answer all of the follow-up questions carefully.

I took advice from dmerz and looked at the 1040 form.  Line 4a shows 281667 (this includes 5273.27 from a second 1099). Line 4b shows 173,735.

None of this makes sense. How do I talk to someone at Turbotax?

OK, thanks. I will try again.

It might ask if you rolled it over to a ROTH.  Do not pick anything that says ROTH on it.  If you rolled it over or converted to a ROTH it will be taxed.

I started over with the 1099-R and now everything makes sense.  Thank you Dmertz.

I rolled over an IRA distribution to a new IRA.  TurboTax properly made the distribution as non-taxable, but the IRA distribution still shows as income.  This impacts my Medicare IRMAA costs.  Medicare uses Adjusted Gross Income, Tax Line 11, as income to determine IRMAA cost.  How can I remove the distribution from income.

@JimRM Look at your actual tax return, Form 1040 Line 4b.  There will be the word ROLLOVER and an amount of 0 on Line 4b meaning no taxable income was added to your tax return for this rollover.

If you are using the online editions -

Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

If you are using the desktop editions -

Click on Forms.  When in Forms mode click on the Form 1040 on the left side of the screen to open

Nontaxable retirement income has no effect on Medicare IRMAA.  Form 1040 line 11 does not include nontaxable income.

Thanks for the reply.

New question...

Turbotax is saying I have a late payment penalty. Most of my income was in the 4th quarter.  How do I review if I actually have a late payment penalty?

Do you have a penalty on 1040 line 38?  It's not for filing or paying late.  It doesn't have to do with last year's tax return or not paying estimates for this year.  The penalty is an "estimated" amount.    It's a penalty if you owe too much or for not paying in enough withholding during the year or not paying in evenly.  Even if you are getting a refund you can still owe a penalty.  It's very common and normal and expected for the IRS or state to bill you for more or send you a refund.

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button