Question

Wife retired under permanent disability box 3 cked on 1099 she's 75 is her pension fully taxable?

Forum|Forum|5 years ago
February 9, 2021
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TurboTax Deluxe Online

Yes it is taxable. Box 7 code 3 does not mean it is a non taxable distribution.

Distributions from an IRA or a pension plan to a taxpayer that has been made due to their Disability is fully taxable to the taxpayer unless the owner had made non-deductible contributions to the IRA or other non-deductible contributions to a pension plan. However, such a distribution is not subject to the 10% early withdrawal penalty, regardless of the age of the taxpayer.