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Ham1
Returning Member

Turbotax discrepancy... IRA RMD Cares Act rollover

There is a discrepancy in Turbo Tax...

I took an RMD from an inherited IRA and then rolled it back into the IRA per the Cares Act guidelines.  Fidelity issued a 1099R as normal.  They also issued a 5498 for the rollover.  When entering the info into Turbotax, the system states “If you took your RMD and later rolled it back into your account under the Cares Act, answer ‘None of this withdrawal was a RMD’ ...” So I checked the box “None of the withdrawal was a RMD”.  There is no way to enter the 5498 data and Turbotax forces me to pay tax on the distribution.  The only way around this I have found is to not report the 1099R data which is wrong.  Can this problem be fixed?

5 Replies
Ham1
Returning Member

Turbotax discrepancy... IRA RMD Cares Act rollover

I have discovered a workaround to the TurboTax bug... the box asking if this is an inherited IRA must be unchecked.  Then TurboTax will ask the follow on questions to correctly account for the repayment of the withdrawal.  After all is accounted for, I then went back in and checked the box that this is an inherited IRA.  

Trygve
Returning Member

Turbotax discrepancy... IRA RMD Cares Act rollover

They said they will fix the bug March 11, 2021

MrPeteH
Level 2

Turbotax discrepancy... IRA RMD Cares Act rollover

Not fixed as of April 1. :(

jpb12
New Member

Turbotax discrepancy... IRA RMD Cares Act rollover

I tried the "work-around" of unchecking the "inherited" box as suggested, then stating I repaid it, but it is still saying that the inherited IRA RMD I took in January is fully taxable, even though I repaid the full amount in July under the Cares Act.  Schwab states that they will be issuing a 5498 showing the rollover (which obviously matches the distribution) in mid May.   Anyone have another work-around to try or any updated info on Turbotax fixing this bug?

DawnC
Expert Alumni

Turbotax discrepancy... IRA RMD Cares Act rollover

If you say it was not an inherited account and that it was NOT and RMD (there were no RMDs in 2020), you will get a question asking what you did with the money?   If you say you returned it, it won't show as taxable.   Delete the 1099-R and re-enter it answering NO to both questions about it being inherited and about the RMD.   If you try to edit the form you already entered, you won't get the questions.   @jpb12

 

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