Skip to main content

1 reply

February 20, 2020

I am not sure what your question is, but let's discuss what you probably want to know.

 

It is possible to contribute after-tax dollars to a pension while you are working. This amount is called your "contribution" or just the "basis".

 

When you start taking payments from your pension, any dollars that were contributed as after-tax dollars are not taxed again. Thus your gross distribution might be $12,000 but the the taxable amount might be only $11,500.

 

If you have a qualified pension plan, then you don't get to choose which dollars you are receiving from the pension; instead, the IRS provides a calculation by which you (well, TurboTax) can determine how much basis is allocated to each pension payment.

 

To make this calculation, TurboTax needs to know a number of things, including what your original basis was in the pension plan. At other times, TurboTax needs to know how much basis has already been taken out of the pension.

 

You should track this yourself. You can contact the pension administrator and they may or may not know the size of your basis, because up until recently, plans were not required to track this. Besides, plans were bought and sold so you may not have the original administrator anyway.

 

But know this...in the simple case that you did not make after-tax contributions to the pension (and many people don't), the basis is zero and the amount previously recovered is zero, which simplifies things.

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