TurboTax ERRORS (?) calculating penalties on Inherited IRA RMDs

[user17718157531]

I am the sole non-spouse / non-dependent beneficiary to two inherited IRAs from decedents who passed in  2020. I am aware of the Secure Act. I've met all the requirements using a CPA x 3 yrs and as of 2024, filed successfully on my own using TurboTax. This is my second attempt filing with Turbo but it's not straightforward.  The IRS requires me to empty the inherited IRAs within 10 years of the deaths; thus, I must take a far greater distribution than the minor RMDs calculated by my financial institution. Due to the change in law that waived some distributions without penalty post-COVID, this is the first year I must also take an RMD from the inherited Roth in addition to the two regular IRAs.  I tried first to manually enter the 1099-R info (separately, for all three IRAs). I answered that "ALL" of the distributions were to satisfy the RMD.  When asked, I identified the far lesser RMD value calculated by my brokerage. In review, Turbo T keeps flagging this is an an error with a pop up window explaining corrections and penalties. Knowing this is wrong, I deleted them all and opted to upload each 1099-R so TurboT could import the data. This time, I box-selected that only "PART" of the distribution was to satisfy the RMD (true--the excess should just be taxed as ordinary income). I again specified actual distribution amount in Box 1, and later the lesser RMD amount identified by my brokerage firm. I got the same results.  Turbo flags this for errors and up to 25% penalties.

I am inclined to think I correctly changed my answer that "PART" of the distribution is to satisfy the RMD because the excess I take is merely to empty these accounts in 10 years per the Secure Act. I don't want a massive balloon payment in the highest tax bracket in year 10 so I've chosen instead to equally divide the total by the number of years remaining. Box 7 on the two regular IRAs is Coded as "4." On the Roth, I took only a few cents in excess of the broker's RMD calc just to round up to the nearest dollar. The Roth has a Code "T" code in Box 7. Per research, T is for people who didn't own the Roth for at least five years before taking first withdrawal. I believe that is incorrect but will have to research. Even if it is correct, the internet claims that beneficiaries are not penalized for withdrawal if five years didn't pass.  They've now been deceased five years so why it's not coded as a "4" also, I'm unclear. I am sure I don't have to pay a penalty but at this point I cannot file my taxes due to the miscalculation on the part of TurboTax. I see several complaints on this glitch last year in community forums but none that match my situation exactly--and any fixes that were reported for 2024 filings are clearly not working for me for 2025 filings (as of this writing Feb. 22, 2026). 

SO: Do I answer PART or ALL of the distribution is to satisfy the RMD(s), and why can't Turbo see that if my broker states for example that $5,000 is the RMD, and I take four to five times greater, it's clearly satisfying the RMD without penalty? Nothing I'm doing is working. Thank you. I am using Intuit Turbo Tax "Do It Yourself" with standard deductions and no itemizing. Is that the "Basic" edition in the drop down menu below? I have an old MAC from 2013 using Catalina 10.15.8 using Google Chrome (so I know I don't get all the updates as I need 11.0 or higher.) 

[ReneV4]

Yes. You should answer that all of the distribution is to satisfy the RMD. Here's how to avoid the RMD loop you are experiencing:

To report your Form 1099-R distribution for your inherited IRAs, which includes the amount of the RMD, do the following:

1. Return to your 1099-R entry by clicking Review to the right of IRA, 401(k), Pension Plan Withdrawals (1099-R) in the Federal Wages & Income
2. Click on the pencil to the right of the 1099-R
3. Click Continue through the entries you've made
4. Ensure you selected, I inherited this IRA, Continue
5. Enter the information about from whom it was inherited, Continue
6. Answer the, "Did you have nondeductible contributions for this IRA?", typically "No", Continue
7. Year when the person from whom you inherited IRA was born, Continue
8. Next, "Let's get more information about your RMD", enter the distribution amount (which in your case is also the RMD), Continue
9. Next, select, The entire distribution applied to the December 31, 2025 RMD, Continue
10. Next, in the Review your 1099-R summary, Continue (not the pencil)
11. Continue answering the questions
12. Next, when you see "Let's go over any required minimum distributions (RMD), select Continue (not the pencil)

Follow the above steps for each of your Form 1099-R entries.

If you still receive alerts about RMDs, be sure each number is exact for each box. It's a good idea to carefully review, especially if imported.

If the above does not resolve the loop issue, try using zero (0) as the RMD amount, since the RMD is the least amount, not the maximum.

If after doing the above steps, you receive alerts, you may go in and remove the Form 5329 (if one was generated), since you know it is all correct.

To delete Form 5329: 

1. Go to Tax Tools on the right hand panel inside of TurboTax
2. Click on the down arrow and scroll down to Tools
3. Click on Tools and select Delete a form from the menu items that appear in the Tool Center
4. Click on the trash can icon to the right of Form 5329

[user17718157531]

Thank you for the swift reply. I followed your instructions as best I could and got the same response. I then deleted all three of my 1099-R forms, uploaded them again, and deleted the Form 5329 under Tax Tools as you instructed. That makes me nervous as to why it was generated if it wasn't needed. TurboTax still flagged me for errors that it asked me to fix and seemed to get hung up on the Roth that required no taxes withheld. Your answer in line 8 was still not clear to me. I entered the amounts of distributions in Box 1 on the 1099s (which were far in excess of the actual RMD amount determined by my financial institution).  After hitting Continue, it asks for the actual RMD per the financial institution so it can compare. I did that each time before I consulted this page for assistance, by the way, so I don't know why it didn't work before.  The glitch in TurboTax is that it didn't ask me for the actual RMD calculation on the Roth 1099 until I had entered Done With Income and got to the Review part of the total tax return. There, it asked me to correct it by a chance to enter the amount which was only pennies different, as I didn't take a large excess distribution from that account like the other two inherited. This time, successfully, no penalties were deemed appropriate. It seems TT needs to fix this issue as I and others have encountered it in years 2024 - 2025.  One issue is that when it was asking me to review the 1099 for correction--it did not identify which of the three at the beginning, so I had no way of knowing which form it objected to.   This time, I could see it enter the amount from the Roth so I knew what it wanted. Thanks again for the help--hope it's right this time.