1099R Code H Error

[edtaylor33]

Direct rollover from Roth 401k to Roth IRA. Non-taxable distribution. Entered Distribution amount in Line 1. Entered 0.00 in Line 2a (taxable amount). Both boxes UNCHECKED in 2b. As soon as I enter the correct CODE H in box 7, it taxes the entire distribution.

Support said that if I enter the same amount in 2a as the distribution amount in Line 1 it will work. But this is wrong. 

$0.00 is the amount listed on my 1099R, Line 2a and this the amount that should be entered. This needs to be corrected.

[macuser_22]

I just tried it to be sure that something was not broken and it works just fine.   The non-taxable rollover is correctly reported on the 1040 form line 4c and 4d (taxable amount is zero).

I suggest deleting then 1099-R and re-enter.

[edtaylor33]

macuser22

 Try first entering a taxable distribution.

I have a pension that is taxable and has the same amount in box 1 and 2a. Line 7 is code 2 and it correctly lists it as a fully taxable event.

But when you add another 1099R with a code H non-taxable distribution. It taxes the whole thing.

[edtaylor33]

Apparently, the only way to get this to work correctly is by entering any Code H entries FIRST. 

Then you can enter the taxable entries with other codes and it will work.

This is just a work around. It shouldn't matter what order they are entered and I see no mention in turbotax that they need to be entered in a certain order.

[macuser_22]

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@edtaylor33 wrote:

Apparently, the only way to get this to work correctly is by entering any Code H entries FIRST. 

Then you can enter the taxable entries with other codes and it will work.

This is just a work around. It shouldn't matter what order they are entered and I see no mention in turbotax that they need to be entered in a certain order.

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OK - I tried that.   A code 2 first taxes the box 2a amount, then add the code H and only the code 2 amount was taxed.  I can't seem to be able to reproduce what you see.  Note that box 4c will have the total of both as it should.

[ @dmertz - does this sound like a bug that you reported?]

[dmertz]

I believe this bug was fixed several weeks ago.  Make sure that you have installed the latest updates to 2019 TurboTax. 

[edtaylor33]

There is most definitely still a bug. I updated on 2/19/2020.

Entered completely new test returns. On one I put in a Code H first and then a Code 2. In the other one I entered the Code 2 first followed by the Code H. I used the same amounts for both. The results are shown here. It works right with Code H only, Code 2 only or Code H followed by code 2. But if you do Code 2 first, it does not calculate Code H correctly.

[macuser_22]

I cannot reproduce that. I get the same correct results reguardless of the order.

Use the About TurboTax - what release and date is your software.

The last update was Feb 12, 2020.

If your software did not update then you might need to apply the manual update.

[dmertz]

The only way I can reproduce this result in the current version of TurboTax is if on the code H Form 1099-R I leave box 2a blank and I mark box 2b Taxable amount not determined.  TurboTax shouldn't behave that way, but since it's the result of an improperly prepared Form 1099-R (a code H Form 1099-R should always have $0 in box 2a and box 2b Taxable amount not marked), I'm not too concerned about that.  With either a zero in box 2a or box 2b Taxable not marked, I cannot reproduce the symptom after 2019 TurboTax release R14 issued on January 21.

Please verify that you are using the current R17 version by clicking Help -> About TurboTax Home & Business 2019 and selecting the Version tab (WinPerFedFormSet = 19.000.2903)

Release R18 (WinPerFedFormSet = 19.000.2909) appears to be on the TurboTax server but the link to it has not yet been published and it does not yet seem to be enabled for in-program update.  Expect that to happen within the next day.  For me, R18 behaves the same as R17 with respect to the issue being discussed here.

Does your test tax return include any Forms 1099-R other than the code 2 form and the code H form?

[edtaylor33]

I manually enter $0 and $0.00 (tried both ways) every time. I've never checked either Box in 2b.

Here is my "about" page. Looks the same as yours

[edtaylor33]

I decided to delete all entries and test it again and things got even weirder. I used 2 different amounts for the Code 2 and Code H entries this time

I used $24000 for the first entry - Code 2 - Taxable distribution.

I used $10000 for the second entry  Code H - Non-taxable Roth rollover

Line 4d {taxable amount) now shows $48000

It doesn't just tax it, it doubles the Code 2 entry  (to $48000) when I add a Code H afterwards. If I delete the Code H entry it goes back to the correct $24,000.

If I add a Code H entry back in, for just $1, it doubles the taxable amount to $48000

I am using the latest update as shown in the previous post

See Photo:

[edtaylor33]

I saw that this problem with doubling was fixed last month. So even though Turbotax said it updated and later showed no other new updates available I decided to try a manual update. Ran it, and now it appears to be working correctly. All updates said that they were downloaded and installed and it showed the latest version numbers.

Could using Windows 7 cause an updating issue?