Question

1099R pension transformed to annuity

Forum|Forum|2 years ago
January 17, 2024
2 replies
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Last year my pension I've been drawing on since 2015 was transformed into an annuity. TT asks about "first year you began getting payments" Question is; is it new or old?

Pension Plan

D

dmertz

Employee

If box 2a of the Form 1099-R shows the correct taxable amount, you should not be using the Simplified Method to determine the taxable amount.

D

DSPatrickAuthor

Thank you. That doesn't seem to address my question, but it is interesting? I don't think I am using simplified but not 100% sure? Do you have any further details?

B

BillM223

dmertz referred to the Simplified method, because you mentioned the "first year you began getting payments" question, which appears if you are going through the Simplified interview in the 1099-R interview.

dmertz was trying to "head you off at the pass" by asking if there is an entry in box 2a, and if so, is it the correct taxable amount. If, so, in the 1099-R interview, when asked, just say that the box 2a entry was used as the taxable value last year (if it truly was). Then you won't be asked about the Simplified or any other method.

The question I have is, was your pension really converted to an annuity? I ask because for purposes of data entry in TurboTax, pensions and annuities are treated the same, so I want to make sure that there was an actual conversion, or just confusion on the wording in the data entry process (pensions and annuities are referred to somewhat interchangeably).

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D

DSPatrickAuthor

Ok, so yes there is the correct amount in 2A because I manually entered it in but I am not asked whether it's correct or not. I'm not sure how to switch the entry form to a different view. The company pension was being administrated by JPMC and is / was 100% funded. They decided to move it over to prudential. When I sign on to the prudential site they call it a "group annuity contract" It's still the same amount and everything. The last step I'm presented with

"Is this the first year you began getting regular payments from Prudential?"

Seems like probably yes but I'm not sure. I also don't know what difference it makes.

B

BillM223

When you were asked if the distribution was from a Qualified Plan, what was your answer?

If you saw the question Any Periodic Payments, did you answer Yes or No? If you answered Yes, then next question is "Is 2023 the first year you started getting regular payments?" If you answer Yes, then the next screen is titled "Let's Figure Out How Much is Taxable". This screen is concerned with your "basis", i.e., after-tax dollars that are in your pension (these are not taxable when they come back to you). The second option is to specify the taxable amount, which you say that you know (I think this overrides the box 2a amount).

Excuse me, but I think the interview screens have changed somewhat this year.

@dmertz, how does this sound, and what about the pension versus annuity question and the first year question?

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