My return was rejected due to FED_Taxable_Inherited_IRA but I did not inherit an IRA.

[N Hari]

Same error here.  Filled yesterday afternoon and got Federal and State got rejected this evening. Traditional IRA to Roth IRA conversion for both of us using Turbo tax online.  I have no inherited IRA.

Will wait till March 5th. Hopefully turbo tax fixes the issue soon.

[dmayhall]

I have an inherited IRA, and my return was rejected, too. I got the same answer as everyone else here, that an update will be available on March 5. I would like to know if it is really an IRS issue or a Turbotax issue. Also thought that it might have to do with taking no RMD for 2020, but due to the pandemic, those were not required. 

[Dacron94dax]

I filed on February 27 and got the same rejection under the same circumstances today. Come on Turbo Tax get you programing done! There were no changes in this area of the tax law.

[tommm3106]

I got my ding letter today.  TurboTax says check back on March 5.  My state return was also rejected.  Are users that have their state returns rejected expected to pay for that e-filing again?

[JantovenNF]

@tommm3106  I don't think so, no.  I tried to re-file and got rejected a second time, but I wasn't prompted to pay again.  

[frisbee5]

Same issue here, backdoor Roth only, no inherited IRA.  Been doing it the same way with TT for the last 5 years, this is the first it's ever been an issue.  

Comparing 2019 to 2020 the only difference in our Forms 8606 is 15b "qualified disaster contributions" is blank on 2020 and was "0" on 2019. I don't expect that is a distinction that matters here.

It appears to be a bug in TT's XML e-file language submission - I just hope they get it fixed as promised by March 5th, I don't want to deal with the hassle of constantly checking back to see if its fixed.

Seems we have earned ourselves a partial refund or discount for next year (if there is a next year with TT)...

[chiu]

I got the same error too.  I didn't inherit an IRA.  I talked to TurboTax, it's a system bug.  I wish it publishes this on the site and let people know this known bug.   

[aonorato35]

Absolutely agree about the refund.  A major stressful hassle coupled with all the other issues in our society these days.   Causing us to spend additional time on preparation and correction of returns plus delay of refunds for those of us getting them.  Spent an hour or more today waiting for a TT rep to pick up phone and then she was unable to help.  I will seriously consider using other software next year unless TT gets this fixed soon and provides some refund.  TT is the costliest of tax prep software and so far has been a bit too casual about this very serious issue.   I have yet to see a TT response on this thread.

[noveltysock]

same problem here

[notrocketscience]

I tried deleting our Forms 8606 (since you can file this separately, need not be with the return), in case that would solve the problem.  Nope -- did not work.   I guess we'll have to wait until 3/5 to see if TT has fixed this.    

I have seen threads on other forums frequented by the backdoor-Roth crowd.  They are talking about this bug, too.  Everyone is having the same problem.

[JantovenNF]

@notrocketscience  - do you mean forums of people using different software from TurboTax?  Or just TurboTax users complaining on another platform (such as Reddit for example)?

[notrocketscience]

@JantovenNF Reddit, Bogleheads, etc.  Take your pick.  TT users who use backdoor Roth (think of that demographic: higher income, fairly savvy) are a vocal bunch.  And they are not pleased.

Is it any consolation that we're not alone? Nope.  Misery loves company, but I'd prefer no misery and no company!

[JantovenNF]

@notrocketscience Thank you.

It does seem like some people were able to file before this most recent update.  So I am hopeful that it'll be fixed by the 3/5 update.

[m2p]

Ditto. I did not inherit an IRA in 2020 and I received the same message within one day of filing my 2020 taxes. Looking forward to March 5 and learning more.

[frisbee5]

I just spoke with TT rep, they said this is a known bug that will be fixed by Friday the 5th.  I asked if those of us known to be affected would be notified, they said they weren't aware of any notification feature (of course).

They did offer a 10% discount on next year's filing, though said I have to wait until next year to call and ask for one since they can't provide retroactive codes or codes that are valid for a year.  Sure seems like a lot of hassle when I could probably more easily achieve a 10% or greater "discount" by just going to another software provider...