Income reported from 1099-R asking if it is "Qualified" or "Non-Qualified"

Forum|Forum|4 years ago
February 18, 2022
1 reply
0 views

I have a 1099-R for Retirement income. The box between field 7 and 8 called IRA/SEP/Simple is not checked, so Turbo Tax is asking me if the plan is "Qualified" or "Non-Qualified" I don't know how to answer this question.

The money comes from an annuity that my employer arranged for me when I retired, where I choose to receive the benefit as monthly payments instead of a lump sum retirement benefit. The money and 1099-R comes from JP Morgan Chase bank but it also lists my company benefits center in the 1099-R Payer's box.

Best answer by DaveinCharlotte1

Sounds like a Qualified plan. Non-qualified plans are plans that you funded out of your own pocket, not getting any kind of deferred-tax benefit at the time. If your employer funded this plan, presumably your employer got the deferred-tax benefit, and it's a Qualified plan. Or, if you paid into this plan and had your payments excluded from your income, it's a Qualified plan. If Required Minimum Distributions apply to this plan, it's a Qualified plan. If your 1099-R shows that all of your payout is taxable, it's a Qualified plan (if Non-qualified, only the capital-gains portion of your payout would be taxable). I think I saw more about this in the TT Help option for 1099-Rs.

DaveinCharlotte1Answer

E2_2

Regarding this response, the annuity you receive monthly is from a qualified plan, the next question that Turbotax ask is what is the rmd. How do you answer this if you only know what your monthly is and the company you worked for has been sold. Thank you

AmyC

Employee

Whoever provides the money to you knows the account balance each year and the RMD. The RMD amount is calculated based on your account balance at the end of the previous year divided by a life expectancy factor from the IRS's Uniform Lifetime Table or other applicable tables.

Most annuities set up to provide you with regular payments include the RMD. Contact the financial company and be sure you are taking the full RMD each year.

@E2_2

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"