Background: My husband has a Traditional IRA and a Solo 401k with an investment firm. He had been receiving RMD (Required Minimum Distribution) from those two for several years from that investment firm.
In 2023, my husband rolled over his Solo-401k to that Traditional IRA in October, 2023. Typically, he received RMD for a given year in December of that year. But this year, the investment firm made a mistake and sent RMD only for the Traditional IRA (that excluded the rollover amount from Solo 401k) and when we brought that to their attention, they sent us a check for the Solo 401k portion of RMD as Excess Contribution Withdrawal.
My Question to TurboTax / Community:
a. Where do I report this excess contribution withdrawal - i.e., what section of TurboTax 2023 app and what question do I need to answer?
b. In TurboTax 2023, it is asking, if he withdrew all of RMD for 2023 or only partial RMD etc. What should I answer to this question?
Thanks in advance for your guidance,
I assume that the return of the excess contribution made to the IRA (the result of rolling over the RMD) occurred in 2023. In addition to the code-7 2023 Form 1099-R that reports the RMD for the IRA, you husband will be receiving either two or three other 2023 Forms 1099-R, one with code G for the rollover from the 401(k) to the IRA and another with code 8 (or maybe codes 7 and 8 together) for the corrective distribution from the IRA and, maybe one with code 7 reporting the distribution of the RMD form the 401(k).
If the code-G Form 1099-R shows only the portion eligible to be rolled over and there is a code-7 Form 1099-R from the 401(k) reporting the RMD portion, just enter all of the Forms 1099-R as received. Since the problem was caught before any Forms 1099-R were issued, hopefully this is how it will be reported.
If the code-G Form 1099-R shows the entire amount originally rolled over to the IRA and there is no code 7 Form 1099-R from the 401(k) for the RMD portion of the distribution, it will be necessary to create substitute Forms 1099-R to split the code-G Form 1099-R into a code-G From 1099-R for the portion eligible to be rolled over and another with code 7 for the portion that was RMD.
I assume that the return of the excess contribution made to the IRA (the result of rolling over the RMD) occurred in 2023. In addition to the code-7 2023 Form 1099-R that reports the RMD for the IRA, you husband will be receiving either two or three other 2023 Forms 1099-R, one with code G for the rollover from the 401(k) to the IRA and another with code 8 (or maybe codes 7 and 8 together) for the corrective distribution from the IRA and, maybe one with code 7 reporting the distribution of the RMD form the 401(k).
If the code-G Form 1099-R shows only the portion eligible to be rolled over and there is a code-7 Form 1099-R from the 401(k) reporting the RMD portion, just enter all of the Forms 1099-R as received. Since the problem was caught before any Forms 1099-R were issued, hopefully this is how it will be reported.
If the code-G Form 1099-R shows the entire amount originally rolled over to the IRA and there is no code 7 Form 1099-R from the 401(k) for the RMD portion of the distribution, it will be necessary to create substitute Forms 1099-R to split the code-G Form 1099-R into a code-G From 1099-R for the portion eligible to be rolled over and another with code 7 for the portion that was RMD.