Question

Non-taxable FERS Annuity supplement included in taxable amount in box 2a on 1099R

Forum|Forum|3 years ago
January 22, 2023
1 reply
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I am a retired federal public safety officer who did not have any earned income during 2022. OPM has included the non-taxable FERS Annuity Supplement in the taxable amount in box 2a of my 1099R. How can I report the reduced taxable amount in turbotax to reflect the non-taxable FERS Annuity?

DaveF1006

Please perform the following steps to determine the taxable amount of your FERS annuity?

Log into Turbo Tax
Go to federal>wages and income>Retirement Plans and Social Security
Select IRA, 401(k), Pension Plan Withdrawals (1099-R)>start
Answer yes to the question if you received a 1099R.
Answer the questions until you reach a page asking you what type of 1099R. if it is issued by the Office of Personnel Management, make that selection on the screen.
Now enter the 1099R exactly the way it is entered on the form
Be sure to answer the question yes asking you if you are a retired public safety officer.
Continue through the questions until the program asks if you receive periodic payments, here you will say yes.
If this is the first year you are receiving payments, check that box in the next screen.
The next screen will ask a series of questions that will determine your taxable amount that will appear in Box 2A of your 1099R. To make these entries, you will need your annuity starting date, plan cost, and number of months you have received payments.
If you received payments prior to 2022, in step 9 you will indicate that you received payment in 2021 or a prior year.
Next screen indicate that the taxable amount has been taxable.
Next screen indicate this was the simplified rule.
Same questions will appear as step 10 above except the program will ask how much tax free amounts were recovered previously. You will need to have this information handy UNLESS this is your first year receiving your FERS annuity.

Your tax free amounts recovered is always the difference between the Gross Distribution amount reported and the taxable amounts in Box 2A. You may need to keep a record of these on a spreadsheet or other means because this information is needed to report your future tax returns. If you continue filing with Turbo Tax, Turbo Tax will keep a record of your tax free amounts and automatically populate in future returns.

If you change providers however, you will need to keep a record of your tax free amounts you previously recovered. Always keep a record of this !!!

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W

wallysueAuthor

Thanks, DaveF1006, for your help. I think my question should have been better phrased. This FERS supplement (distinct from the FERS annuity), also sometimes referred to as a Social Security Supplement, is a special provision designed to help public service officers forced to retire at 57 reach the minimum age to receive social security (typically age 62).

As such, it's not an annuity to which the retiree has contributed.

I've determined the supplement is fully taxable and will enter the 1099-R numbers exactly as they appear on the 1099-R (as you advised) with no reduction in the taxable amount. Thank you for your help!