Nonqualified Plan Income Questions in TurboTax

[SaratogaJoe]

I have a W-2 for a supplemental pension that has the same amounts in Box 1, Wages, and Box 11, Nonqualified Plans.  Why does TT then ask me if this income is from a Nonqualified plan?  And, what are the consequences of checking or not checking that box?

[RobertB4444]

Your plan is clearly non-qualified.  Non-qualified plans do not allow the employer paying them to deduct the costs.  Qualified plans benefit the employer a lot more.  

@SaratogaJoe 

[SaratogaJoe]

I understand that part. What I do not understand is why TT asks me to check the unqualified plan box after I have already entered the amounts I received as from an unqualified plan in Box 10 of the W-2 entry form. Are they asking about that income or other income on that W-2? 

[RobertB4444]

It's asking about that box 10 income and making sure that you didn't enter it in error.

@SaratogaJoe 

[SaratogaJoe]

That doesn't make sense to me.  Does anything happen to the calculations or the data passed on to the IRS if I check or do not check the box?

[RobertB4444]

The question I see when I do this is whether I took the money in box 11 (sorry, I wrote 10 earlier) out of the plan or contributed it to the plan.  If that is the question that you're dealing with then you should answer it so that the system knows how to treat the distribution.

@SaratogaJoe 

[SaratogaJoe]

That is not the question I see, but I was using a prior year copy of TT.  I had purchased a different product for 2023 and ran into two of those unqualified plan check boxes so I decided to go back and see how TT handled the same issue in the past.   Based on your response, I will purchase a copy of TT for 2023 and see how the current version actually deals with the issue.  

[SaratogaJoe]

OK, I purchased and installed TT Deluxe 2023.  I see the Nonqualified Plan question you mention. Better than the old way, but still seems unnecessary and confusing.   According to the Instructions for Employee on the back of my W-2, amounts in Box 11 would only be for money paid to me.  I fail to see how Box 11 could be used for money I paid into a Nonqualfied plan.

Other issues I found with TT are:  1) it failed to import my 2022 Form 1040 in PDF format; 2) when it downloaded my  1099-INT from Ally Bank it downloaded only two of my three accounts, and I do not see any way to edit that information to correct the total; 3) it could not download data from either CapitalOne of Sallie Mae, even though they are both very large institutions.  Hard to believe this is the #1 tax prep program.