Form 8606 for tax year 2020

[jimt236]

I have filed form 8606 for about ten years. In early 2020 I received a partial RMD, which I repaid as soon as I realized that RMD was not required for 2020. My net RMD was zero. Am I required to file form 8606 for 2020?

[AmyC · Accepted solution]

The 8606 says to first use the 8915-E. You may not need to file 8606, if you are net zero and file 8915-E. I always lean towards more is better than less after having to help locate nearly 30 years of 8606 forms for someone else. I suggest you keep a notebook with your forms showing basis, brokerage statements and W2 forms someplace separate and safe from your returns. See Form 8915-E: Qualified 2020 Disaster Retirement Plan Distributions and Repayments,

Form 8606 says: Coronavirus-related distributions. 

If you or a member of your household was impacted by the coronavirus and you made withdrawals from your retirement plan in 2020 before December 31, you may have coronavirus-related distributions eligible for special tax benefits. Coronavirus-related distributions are reported on Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments, as qualified 2020 disaster distributions. See the Instructions for Form 8915-E. Your Form 8606 may be impacted by those distributions.

You must file Form 8606 if any of the following apply.

• You made nondeductible contributions to a traditional IRA for 2020, including a repayment of a qualified disaster or reservist distribution.
• You received distributions from a traditional, SEP, or SIMPLE IRA in 2020 and your basis in these IRAs is more than zero. For this purpose, a distribution doesn’t include a distribution that is rolled over (other than a repayment of a qualified disaster distribution (see 2020 Forms 8915-C, 8915-D, and 8915-E)), qualified charitable distribution, one-time distribution to fund an HSA, conversion, recharacterization, or return of certain contributions.
• You or your spouse transferred all or part of their traditional, SEP, or SIMPLE IRA in 2020 to the other spouse under a divorce or separation agreement where the transfer resulted in a change in the basis of the IRA of either spouse.
• You converted an amount from a traditional, SEP, or SIMPLE IRA to a Roth IRA in 2020.
• You received distributions from a Roth IRA in 2020 (other than a rollover, recharacterization, or return of certain contributions—see the instructions for Part III, later).
• You received a distribution from an inherited traditional, SEP, or SIMPLE IRA that has a basis, or you received a distribution from an inherited Roth IRA that wasn’t a qualified distribution. You may need to file more than one Form 8606. See IRA with basis under What if You Inherit an IRA? in Pub. 590-B for more information. 

Use Form 8606 to report:

• Nondeductible contributions you made to traditional IRAs;
• Distributions from traditional, SEP, or SIMPLE IRAs, if you have a basis in these IRAs;
• Conversions from traditional, SEP, or SIMPLE IRAs to Roth IRAs; and
• Distributions from Roth IRAs.

[fanfare]

You did nothing.

When you take no action on your IRA, you don't have to include Form 8606.

Just keep a copy of the last one you filed.

[jimt236]

Thanks Amy. I appreciate your help.

[jimt236]

Thanks Fanfare. That is exactly the answer that I I wanted.

[fanfare]

actually you did something.

You took a distribution but put it back.

This would generate a 1099-R and be reported by you as a rollover.

[rodmantaylor]

I cannot find form listed in my return in TurboTax. Why?

[JamesG1]

TurboTax automatically generates IRS Form 8606 if you reported any of these on your tax return:

• Nondeductible contributions made to a traditional IRA
• Distributions from a traditional, SEP or SIMPLE IRA that had nondeductible contributions (excluding rollovers, conversions, recharacterizations, qualified charitable distributions, one-time distribution to fund an HSA, or return of certain contributions)
• Conversions from a traditional, SEP, or SIMPLE IRA to a Roth IRA
• Distributions from a Roth IRA (other than rollovers, recharacterizations, or a return of certain contributions)

To trigger IRS Form 8606 in TurboTax, follow these instructions:

1. Open your return if it isn't already open.
2. Inside TurboTax, search for this exact phrase, including the comma: 8606, nondeductible IRA contributions
3. Select the Jump to link in the search results.
4. Proceed through the IRA section, answering questions as you go.
5. When you reach the screen Any nondeductible contributions to your IRA? answer Yes, then continue. We'll generate and fill out the 8606 behind the scenes.

[dbussey]

Hello,

Where in Turbo Tax do I go to input information on a Form 8606?

[Critter-3]

If you had an 8606 from the prior tax year then it is entered in the IRA contribution section if you make another non deductible contribution  or in the 1099-R entry section if you took a distribution or rollover from an account with carryover basis in it.