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I took my RMD early in 2020 and then redeposited it when the CARES act said I could do so. The original RMD withheld fed & state taxes. I get a 1099-R for the original RMD, but nothing to support the redeposit.
What should I do to indicate the RMD was returned,and still get credit for the taxes withheld? I can't find a CARES act special cases screen. If I code in a contribution equal to the distribution to the traditional IRA, the software posts a $7000 taxable amount for contribution to a Roth.
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Unless the client sent back the total distribution amount, including withholding, then the withholding is taxable distribution. I would show what they gave back as an indirect rollover. That would likely leave a Taxable income = withholding.
Someday (due by May 31) the client will get a 5498 that will show what was repaid. Often they send it as a substitute https://www.irs.gov/pub/irs-prior/f5498--2020.pdf I already have one for one of my IRAs.
Answers are easy. Questions are hard!
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You should follow the instructions here, for your client's tax return:
But you used "I" a lot.
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