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February 14, 2025
Question

I got a 1099-R from my 401K from a check from a "highly compensated employee audit". Box 2a is filled. Why does D&C->Retirement Income Results say it's not taxable?

  • February 14, 2025
  • 1 reply
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A "highly compensated employee audit" measures the 401K contributions of "highly compensated employees" against not-highly-compensated employees. If that proportion is too high, the HCEs have to take a distribution. I received a distribution for $X and a check for $X - deducted taxes. I got a 1099-R for $X (deducted taxes). Box 2a says the entire $X is taxable. However when I am at Deductions & credits=> Retirement income results, it says the Taxable amount is $0. This concerns me that Turbo Tax is doing something inaccurate. (I would like to not go to jail please).

    1 reply

    February 14, 2025

    When I get to Federal Review the "Wages" is my W2 amount + the $X indicated. So I guess things are accurate? 

     

    I maintain there is a bug in the "Retirement Income Results" screen because the $X was obviously taxable!