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Required Minimum Distribution reversed / put back in account

Level 1

I have a client who took her RMD in April and then returned the money to her retirement account in May after learning that RMDs were not required in 2020.  The 1099-R received doesn't take her reversal/contribution into account.  How can this be entered and treated appropriately (recover taxes withheld) in ProConnect?

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14 Replies 14
Level 15

You mark it as a Rollover. There is nothing special about that.

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Level 1

I have the same situation.  But checking the rollover box is not taking the amount out of taxable income.  Only the tax that was withheld is remaining, as it should.  I am still looking for a solution.  Reflecting taxable amount as $0, corrects the taxable income, but generates error messages.

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Level 15

"Only the tax that was withheld is remaining, as it should."

The Gross would be taxable, unless that same amount is rolled over. you cannot have rolled over the withholding; to redeposit that same total would require "makeup" by other funds. Did they redeposit the Gross they first took, or not?

If not, that is a taxable amount.

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Level 1

In my case, the gross amount was put back in the account.

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Level 11
Level 11

On the 1099R worksheet you scroll almost to bottom under rollovers, and check the correct box

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Level 15

Let's dive a bit more into this: "How can this be entered and treated appropriately (recover taxes withheld) in ProConnect?"

You don't "recover" the tax withheld.

Here is the math:

Gross distribution minus tax withheld = net paid to the client.

To fully Roll Over requires you to put back the Entire total, or Gross. That means the amount withheld is needed as a Make Up amount from current funds on hand. You need to put back the Gross. Then, on the tax form, the amount withheld is treated the same as any withholding and any estimates = just an amount prepaid to taxes owed.

If you only return the amount you got, that is not a Full Roll Over. That is a Partial Roll Over. The amount not put back in, whether because of withholding or because you decide to keep and use some of the distribution, is the amount Taxable. Then, you compute how it is taxable per the tax form, basis, etc.

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Level 1

According to Pro Series support,  this cannot be processed yet.  It will be processed on the Qualified Disaster Distribution Smart worksheet, found on the 1099-R worksheet.  It already references Coronavirus-related distribution.  Form 8915E is not yet included in the program but will be finalized on 2/25.

 

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Level 15

A rollover doesn't need the Disaster form. 8915-E is used for allocating the taxable income over three years or taking the total amount in the first year.

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Level 1

Where in TurboTax do you enter a Rollover?

I made the RMD and then reversed it, but I received a 1099-R and can't find where to enter it as a Rollover.

Help!

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Level 15

@fiddlemotown 

You seem to be lost on the internet.

You’ve come to a Peer User community for Intuit Tax Preparation products supporting tax preparation professionals using ProSeries, Proconnect and Lacerte , and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Thanks.

 

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Level 1

You may be right, but no one over there knows the answer.

if you know the answer, why not answer?

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Level 15

"if you know the answer, why not answer?"

No one here is using TurboTax. That's the whole point of the different Communities.

TurboTax has a Help system. Did you ask the Help system? Search on 1099-R and search on Rollover.

You are posting in a Section of the community for using ProSeries, which is not TurboTax; Lacerte, which is not TurboTax; and ProConnect, which is not TurboTax.

There is a lot of different software in use by professional tax preparers to do their clients' tax returns. None of these will be TurboTax.

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Level 15

@fiddlemotown 

Here:

https://ttlc.intuit.com/community/forums/searchpage/tab/message?advanced=false&allow_punctuation=fal...

But now, you have to identify Which TurboTax program you are using; go There and use those tools.

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Level 15

@fiddlemotown 

Here's an example of the users here having the same issue:

https://proconnect.intuit.com/community/community-ideas/separate-searches-for-proconnect-proseries-a...

We all want Search tools to work better. That doesn't mean just popping into any community on the internet to get their help on software we are not even using.

Hope that search link helps.

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