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Why does TurboTax not allow me to separate distributions I took before I turned 59 1/2 from distributions I took after I turned 59 1/2?

Forum|Forum|7 years ago
June 5, 2019
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I took $3,000 in IRA distributions in 2018 before I turned 59 1/2 and $7,000 in IRA distributions afterwards. TurboTax is insisting that since I took $3,000 in distributions before I turned 59 1/2, the 10% penalty tax applies to all $10,000 in distributions. I do not see the basis for that.

TurboTax Self Employed Online

Best answer by dmertz

This has to do with how the payer reported the distributions on Form(s) 1099-R. Unless the distributions represent a modification of a series of substantially equal periodic payments, the IRA custodian should have issued separate Forms 1099-R for the portion distributed before age 59½ (code 1) and the portion distributed after age 59½ (code 7). If the payer reported the entire $10,000 on a code 1 Form 1099-R, you'll need to claim an Other reason exception to the 10% penalty on the $7,000 distributed after age 59½.

D

dmertzAnswer

Employee

This has to do with how the payer reported the distributions on Form(s) 1099-R. Unless the distributions represent a modification of a series of substantially equal periodic payments, the IRA custodian should have issued separate Forms 1099-R for the portion distributed before age 59½ (code 1) and the portion distributed after age 59½ (code 7). If the payer reported the entire $10,000 on a code 1 Form 1099-R, you'll need to claim an Other reason exception to the 10% penalty on the $7,000 distributed after age 59½.