Question

Covid -19 distribution from IRA

Forum|Forum|5 years ago
March 2, 2021
1 reply
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I have been unable to get my IRA distribution, that is Covid -19 eligible, to show up correctly so that only 1/3 is taxable in 2020. I did a $60K conversion from traditional IRA to Roth IRA and also took a cash distribution of $60K from the same traditional IRA (which is the Covid -19 eligible amount). I received (1) 1099 from my financial institution showing a gross distribution of $120K. No matter how I enter this information (either as one or two IRA 1099 distributions), Turbo Tax states on the last page 'Taxpayer reported $0 as COVID -19 Distribution' and leaves the full amount of the COVID -19 eligible distribution ($60K) as taxable in 2020.

macuser_22

Employee

@morganmbur wrote:

I have been unable to get my IRA distribution, that is Covid -19 eligible, to show up correctly so that only 1/3 is taxable in 2020. I did a $60K conversion from traditional IRA to Roth IRA and also took a cash distribution of $60K from the same traditional IRA (which is the Covid -19 eligible amount). I received (1) 1099 from my financial institution showing a gross distribution of $120K. No matter how I enter this information (either as one or two IRA 1099 distributions), Turbo Tax states on the last page 'Taxpayer reported $0 as COVID -19 Distribution' and leaves the full amount of the COVID -19 eligible distribution ($60K) as taxable in 2020.

TurboTax does not support a single 1099-R that goes to two different destinations (conversion and COVID related).

You must split the 1099-R into two 1099-R's with the proportions for each totaling the original 1099-R.

One would be for the Roth conversion and one for the COVID distribution. The follow-up questions will be different for each.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

M

morganmburAuthor

I have split the 1099 into 2 separate entries. One for the Roth conversion and one for the Covid eligible withdrawal. The program is still taxing the full Covid eligible amount of $60K in 2020 rather than only the 1/3 due in 2020. I did not check the box to tax the full distribution in the current year.