Late RMD trigger

[ALF246]

My 2023 RMD from one of my brokers was not paid until Jan 2024 so I have no entry for 2023,

What action in Turbo tax will trigger the form 5329?

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[DaveF1006 · Accepted solution]

It depends. The IRS says, that if this is your first RMD distribution, you have until April 1 of the following year to take your distribution. If this is the case, have your broker issue you a 1099R reporting the Distribution. If they refuse, create a 1099R by asking the broker to share their address and EIN then create a 1099R to report the distribution.

If this isn't your first distribution, you will still need to create a 1099R according to the instructions given to report the RMD requirement that wasn't taken by 12/31/2023.  

Here is how to report. 

• Open or continue your return.
• In the Federal section, select Wages & Income.
• Scroll to locate Retirement Plans and Social Security.
• Select Start or Revisit next to IRA, 401(k), Pension Plan Withdrawals (1099-R)...

Now enter the 1099R information. If this is your first distribution, you would report the full amount of the RMD received as taxable income. Be sure the taxable amount is the same in Box 1 and 2a. If there was federal income tax withheld it will be listed in Box 4 and a distribution code of 7 in box 7. Hopefully the broker will issue you a 1099R if this is your first distribution.

After you complete your 1099R entry, here will be questions regarding your RMD in s subsequent screen. It will ask was this a withdrawal for RMD, you will say yes. Then there will be a dropdown that will occur asking if all this distribution was an RMD.

Now if this is not your first distribution, you would trigger an RMD by reporting a 1099R. For this you would need to create a 1099R. For this you would need your brokers address and EIN and then report it just like the steps I listed above. For the 1099R form, list $1 in Box 1 and 2A. Nothing in Box 4 but place a distribution code 7 in line 7.

When you get to the screen asking if  this a withdrawal for RMD, you will say No. Later on in the interview, there will be a screen that asks that says "Tell Us About your Retirement Distribution" you will select you did not receive all of the retirement distribution.  Then the next screen will ask what your required minimum distribution is and then how much you received.  Here is where you would say 0 and this will trigger the 5329.

I realize this may be a long process but a necessary one. Just remember if this is your first RMD, you have taken the distribution in time and there will not be a 5329 generated.