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April 12, 2024
Question

Why is a RSU disbursement (noted in W2 Box 11 and accounted for in Box 1) that had FICA taken out the prior tax year being treated as a nonqualified pension plan?

  • April 12, 2024
  • 1 reply
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Turbotax software is forcing me to answer the following question after entering my W2 information that includes a Restricted Stock Units (RSU) disbursement in box 11: "Did you take money out of your nonqualified pension plan?" The RSU disbursement is not a nonqualified pension plan but rather RSU compensation that had FICA taken out in prior year due to retirement forfeiture rules. In addition, The amount noted in box 11 is already accounted for in box 1 wages. 

I cannot simply answer "No" because the "No" option is also not a valid response because it notes that I'm contributing that amount to a nonqualified pension plan. The "No" choice states the following: "No, this is money I contributed to my nonqualified or Section 457 plan"

The software is not offering a choice that aligns with the RSU disbursement.

1 reply

April 15, 2024

The instructions to box 11 on a W-2 form reference a distribution from a pension plan:

 

 

I suggest you ask your employer for clarification as to why there is an entry in box 11 on your W-2 form and proceed from there.

 

 

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