Several 1099-Rs box 7 checked as N and R and 02- What to do

[Random_Bunny]

I received a three (3) 1099-R... and hoping I can get some help on what I am supposed to do in TurboTax

• box 7 (distribution code) marked R (Recharacterized IRA contribution made for 2019 and
  recharacterized in 2020), box 2a (taxable amount) has 0, box 2b (taxable amount not determined and Total Distribution) is empty, box 14 (state tax) is 0, rest of the fields are all empty. I remember while going through TurboTax, somewhere along the process- TurboTax said I have re-file my 2019 taxes. Is that because of this R code? How do I re-file 2019? Where do I re-file? In Turbo Tax?
• box 7 marked N (Recharacterized IRA contribution made for 2020 and recharacterized in 2020). Am I supposed to do anything for this? Where will I find out the action I have to take for this in TurboTax?
• box 7 marked as 02 (Early distribution, exception applies), IRA/SEP/SIMPLE box marked X (I think this is related to IRA in my case),  box 2b has X and X, box 4 has 0, box 1 and 2a have the same amount. Am I supposed to do anything for this? Where will I find out the action I have to take for this in TurboTax?

[macuser_22]

A 2020 1099-R with a code R in box 7 (Recharacterized IRA contribution made for 2019 and recharactorized in 2020) will tell you that you must amend 2019.

A code R 1099-R does nothing whatsoever if entered into the 1099-R section of an amended 2019 return. It does not get sent to the IRS and nothing goes on the tax return at all. The only purpose of the 1099-R is to report the recharacterization to the IRS, but it still must be reported on your 2019 tax return.

The box 1 on the 1099-R will report the total recharacterized amount (contribution plus earnings) but it does not separately report the earnings and box 2a must be zero.

The proper way to report the recharacterization and earnings which is to enter the 2019 IRA contribution in the IRA contribution interview section and then say yes to "Did you switch from a Roth to a Traditional IRA - recharacterize".

The amount The amount of the original Roth contribution must be entered - not any earnings or losses.

Then TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharactorized.

There is no tax or penalty on the before-tax earnings since the earning were simply switched into the recharactorized account.

That is the only way to prepare and attach the proper explanation statement for a code R 1099-R.

Enter IRA contributions here:
Federal Taxes,
Deductions & Credits,
I’ll choose what I work on (if that screen comes up),
Retirement & Investments,
Traditional & Roth IRA contribution.

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "ira contributions" which will take you to the same place.

Since the after-tax Roth contribution is now a Traditional IRA contribution it can be either a before-tax deduction if your MAGI allows a deduction which might result in an additional 2019 refund, or it will be an after-tax contribution reported on a 8606 form (line 1 & 14) as a "basis" in the Traditional IRA that will reduce the tax of future distributions.

A code N is reported the same way on your 2020 tax return.

[Random_Bunny]

Thank you Macuser_22. I remember you- you gave me these instructions last year (2020) here >> (https://ttlc.intuit.com/community/retirement/discussion/re-contributed-to-roth-shouldn-t-have/01/202...) and I did follow your advise to report this recharacterization. So, I believe I took care of it while filing my 2019 taxes last year. 

• But, now I have received 1099-R with code R in box 7. So, do I need to still go back and amend my 2019 taxes again or since I did what suggested last year so there is no need to do anything and simply ignore this 1099-R with code R in box 7?
• 1099-R with code N, TurboTax must have done its things because it imported this 1099-R with code N from Vanguard. So I do not have to do anything extra here- correct? 
• Same with 1099-R with 02 in box 7. TurboTax imported from Vanguard and I filled some more info that it asked me- so I am assuming I am good there. So nothing extra to be done?

[macuser_22]

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@Random_Bunny wrote:

Thank you Macuser_22. I remember you- you gave me these instructions last year (2020) here >> (https://ttlc.intuit.com/community/retirement/discussion/re-contributed-to-roth-shouldn-t-have/01/202...) and I did follow your advise to report this recharacterization. So, I believe I took care of it while filing my 2019 taxes last year. 

• But, now I have received 1099-R with code R in box 7. So, do I need to still go back and amend my 2019 taxes again or since I did what suggested last year so there is no need to do anything and simply ignore this 1099-R with code R in box 7?
• 1099-R with code N, TurboTax must have done its things because it imported this 1099-R with code N from Vanguard. So I do not have to do anything extra here- correct? 
• Same with 1099-R with 02 in box 7. TurboTax imported from Vanguard and I filled some more info that it asked me- so I am assuming I am good there. So nothing extra to be done?

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Code R and N are reported as I said.  If already reported then the 1099-R can be ignored.

A code 2 reports a distribution and must be entered on your tax return.