ESOP Rollover to Traditional IRA and getting penalized

[BuzzTheMan2]

I just Retired end of last year and I'm over 65 and my company said I had to roll over my ESOP to IRA so I opened a traditional IRA and the money rolled over last year.  Now people over 50, you can add up to $7K but I had a lot more put in and will next 4 years.  Will I have to withdrawal money to get under $7K not to get penalized?

[MaryK4]

No, if you roll your ESOP over to a traditional IRA, you do not pay tax or penalty because the contribution limits do not apply to rollovers.  

[BuzzTheMan2]

Thank You for your answer but I must have something incorrectly entered.

TurboTax Deluxe is taking 6% penalty so what don't I have entered correctly?

[MaryK4]

In TurboTax, you enter the 1099-R and the follow-up questions allow you to report as rollover.  See Where do I enter an IRA rollover? - TurboTax. 

If you have the 6% penalty, you will have to delete the entry n the Deductions & Credits section.  Add to this post if you have any problems with the entry

@BuzzTheMan2

[BuzzTheMan2]

I didn't get a 1099-R, I got a 1099-B which shows the full amount of the ESOP and not the amount that was Rolled over to Traditionally IRA, it is 1/5 of the total amount that was rolled over.

Does that help?