Question

1099R in 2021 for income received in 2022

Forum|Forum|4 years ago
February 7, 2022
1 reply
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My husband and I were supposed to start receiving annuity payments on 01/01/2022. The company (MassMutual) sent us a 1099R for 2021 on the payments that were supposed to be received on 01/01/2022. We received one deposit on 01/05/2022 and one deposit on 01/11/2022. I called them and they said that they "processed" the payments on 12/31/2021. I have never heard of basing taxes on the "processed" date. Normally the taxes should be based on the "payment date" - correct? Is this legal? I tried finding the answer on the IRS website, but couldn't find anything even close.

T

TomD8

Employee

The IRS follows the concept of "constructive receipt." Here's the definition:

Income although not actually reduced to a taxpayer's possession is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he could have drawn upon it during the taxable year if notice of intention to withdraw had been given.

https://www.law.cornell.edu/cfr/text/26/1.451-2

Be aware that the IRS receives a copy of your 1099-R, and if it is dated 2021 their computers will look for it on your 2021 tax return.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Y

yesjesusluvsu2Author

Thank you for the reply! I used the term you included in your reply to do some additional research. It looks like we are on the hook for 2021, but I'm not happy about it. Their customer service person told me that they "processed" the distribution on 12/31/2021, but did not release / send the funds to our bank until 01/04/2022 due to the first falling on a Saturday and them being off on 01/03/2022 for the New Year holiday. To top it all off, someone entered my bank account number incorrectly when my deposit was set up. My deposit did not get straightened out until after I had made 3 phone calls and finally convinced someone to compare my deposit information with my husband's information. Their attitude was that I just needed to be patient even though my husband's deposit had made it to the bank several days earlier. I will not be giving MassMutual a very good review. I get a small annuity deposit from a former employer. I started receiving these deposits on 01/01/2021. I didn't have to go through any hassles with them, nor did I go through any hassles with a pension check that I get from a former employer. Thank you again for your help!!!