1099r distribution and 100% repaid

Forum|Forum|5 years ago
January 17, 2021
2 replies
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I received a 1099R for 2020. Block 1 and 2 show $32800. I replied in the later questions that all had been returned to the IRA. TT shows I owe $1543. If the Form 5498 will report that all has been returned, do I need to even enter any 1099R data

Best answer by DawnC

Don't enter 0 for the 1099-R; TurboTax does handle the return of a distributed 2020 RMD (required minimum distribution) Form 1099-R is required to have the entire gross amount in boxes 1 and 2a, box 2b Taxable amount not determined marked, the federal tax withholding in box 4, code 7 in box 7, the IRA/SEP/SIMPLE box marked and any state tax withholding in box 14.

Since RMDs were waived for 2020, no part of the distribution was actually an RMD even though it was taken with the intention of satisfying an RMD. In TurboTax, indicate that the distribution was not an RMD. Indicate that you moved the money to another retirement account (or returned it to the same account), then indicate how much of the distribution you returned to the IRA. TurboTax will include the entire gross amount on Form 1040 line 4a but exclude the amount rolled over from the amount on line 4b. TurboTax will also include the word ROLLOVER next to the line.

If you did not substitute other funds for the amount withheld for taxes so as to complete the rollover of the entire gross amount of the distribution, the amount of the withholding remains distributed, not rolled over, and subject to tax; it's too late to complete a rollover of that portion of the distribution. If the overall tax liability determined on your tax return is less than your total withholding, including the amount withheld from the IRA distribution, you'll get a tax refund.

@btb010438

VolvoGirl

Employee

Was there any withholding taken out in box 4? Did you also replace the withholding when you returned it to the IRA? Was this for a RMD?

jrotast

It appears that Turbo Tax is not including my withholding in the total distribution so it is saying that I did not meet the RMD. How can I correct that?

Thank you,

Jo Ann Rotast

mglauner

There is no way that TurboTax knows that you didn't meet your RMD requirement for that year. The IRS doesn't know this either. If you received a 1099-R for a Retirement Plan distribution from an IRA, be sure you indicated IRA when entering it. If you entered the withholding shown on the document, it will be reported, and you can see this on the Tax Payments Worksheet.

If you withdrew your Required RMD, you can indicate that 'all or part of this distribution was RMD' and then enter the RMD amount as equal to (or less than) the distribution amount shown in Box 1.

You may want to delete/re-enter your 1099-R.

Here's some RMD FAQ's.

@jrotast

btbuz

I have the same problem I received a 1099R with the full amount of the distributions and a 5498 showing all was returned. No withdrawal required for 2020. Turbo Tax does not provide a way to handle this. I don't feel that I should just enter 0 for the 1099R, but don't see any other option.

VolvoGirl

Employee

Since there is no RMD required for 2020, after you enter the 1099R say it was NOT an RMD and then that you rolled it over (even if back into the same account).