How to process, with detail, my COVID ROTH IRA early Distribution to avoid the penalty now that 8915-E has been released?

[Wyatt5]

I have everything else ready but I need to process my early Roth IRA distribution now that the 8915-E forms have been updated into TurboTax for Home and Business.  Would someone mind guiding me on what the detail procedure is within TurboTax to process and to spread out the tax over three years?  I have not imported my form from my ROTH IRA Provider yet.  I also need to make sure I have accounted for my contributions so that I do not pay tax on that portion as well.  Thank you so much for any guidance.

[Irene2805]

Form 8915-E is available in both the CD/Download and online versions of TurboTax.  If you are using the online version or after you have updated the CD/Download version be sure to go back through the 1099-R section in the federal return.

First enter (or import) the 1099-R from your Roth IRA provider.

In the screens following the 1099-R entry screen:

• You will see a series of questions to see if you are exempt from the additional taxes on early withdrawals [Screenshot #1, below]; and 
• You will  be asked if you want to pay all the tax this year of just 1/3, with the rest reported over the next two years. [Screenshot #2]  Check the box if want to pay tax on the entire retirement distribution in 2020.  Leave it blank if you want to spread the payment over 3 years.

Screenshot #1

Screenshot #2

[Wyatt5]

Thank you for your quick response.  I will test this procedure and respond shortly with my results.

[Wyatt5]

Follow-up:

I followed the instructions however there is a problem.  The full amount distributed should be reported as a covid distribution however it is showing $0 dollars and is not spreading out the amount over three years.  Can you tell me where to go into the form and enter the full amount to be entered for the reported amount so it can be distributed properly?  Thank you!

[Wyatt5]

Or, Maybe its a bug in the code?

[DoninGA]

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@Wyatt5 wrote:

Follow-up:

I followed the instructions however there is a problem.  The full amount distributed should be reported as a covid distribution however it is showing $0 dollars and is not spreading out the amount over three years.  Can you tell me where to go into the form and enter the full amount to be entered for the reported amount so it can be distributed properly?  Thank you!

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Assuming that you indicated all of the distribution was due to Covid-19, did you repay 1/3 or more of the distribution?  If so, then the taxable amount of the distribution will be a 0 on Lines 4b or 5b of the Form 1040.

The full distribution amount should be on Line 4a or 5a.  Is there any amount on 4b or 5b?

What is the code in box 7 of the 1099-R?  Is the distribution from an IRA and if so which type, Roth or Traditional?

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

[Wyatt5]

We did not repay 1/3 of the amount or more of the distribution. See below for answers to your questions.  We also had 33,700 in contributions to the IRA.

[Wyatt5]

Here is the rest.

[Wyatt5]

I may have figured out my own problem.  The issue was on Form 8606.  Line 25b was blank for some reason and should have listed the total taxable amount.  Now I just need to look for other issues that could cause a problem.