The data is nonqualified pension withdrawal that was report on the W-2. I put it in TurboTax and it is treating it as Other Income and not W-2 income.
Do have to delete the return and start over?
No, TurboTax knows how to properly report this income and put it where it belongs. "Other Income" is properly reported on Schedule 1 that flows through to your Form 1040 on line 10. It is taxed the same as 1040, line 1a.
A nonqualified pension withdrawal is generally reported in Box 1 and 11of Form W-2, as a distribution from a Nonqualified 'pension' plan, and is taxable.
No, TurboTax knows how to properly report this income and put it where it belongs. "Other Income" is properly reported on Schedule 1 that flows through to your Form 1040 on line 10. It is taxed the same as 1040, line 1a.
A nonqualified pension withdrawal is generally reported in Box 1 and 11of Form W-2, as a distribution from a Nonqualified 'pension' plan, and is taxable.
Hi Linda, Thank you for the clarification. For the past 12 years, we have been reporting the nonqualified pension and deferred account withdrawals from the W-2, in line 1a of the 1040 and that was all that was required.
Apparently, in July the IRS decided that these now need to be treated as Other Income and directed they be reported on the Schedule 1, in a notice released last July. We had not seen this change, although we are both retired lawyers and my wife continues to follow tax law. This change was not highlighted in the Tax Update Online Seminar she took in December. She did find a discussion of the change online last night after we received your update. There is nothing in TurboTax about it. Always something.
The IRS said they wanted to clarify the difference between wages and nonqualified source income. That the change would “simplify the 1040” – not that it does.
Again, thank you. We are now one step closer to filing.
Best wishes and be safe,
John