Get your taxes done using TurboTax
The IRS instructions for Information returns , including 1099 forms, state that you should prepare a new information return. That may be up to interpretation, but one would assume it would be best to complete all boxes as opposed to just the ones that changed.
The best thing to do would be to prepare a substitute Form 1099-R and enter everything the way it should have been reported, with the distribution in box 1, taxable amount in box 2(a), code in box 7, Michigan in box 15 and the Michigan tax withheld in box 14, any other information that should be on the form as follows:
- Go to the personal income section of TurboTax
- Find the Retirement Plans and Social Security menu option
- Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
- Choose Add Another 1099-R
- Choose I'll type it in myself
- On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R
You will complete a Form 1099-R entry using all of the correct information from your Form 1099-R. You will be given the option to complete Form 4852, on which you can explain why you are issuing the substitute Form 1099-R.
On your Colorado return, the pension income should be picked up from the box 1 entry on the 1099-R form, but you will have to verify that before you file the Colorado return. The pension income should be reported on the Colorado return since that is the state you lived in when you received it.
For Michigan, you need to back out the pension income as it isn't taxable there, but you need the box 15 and 14 populated for Michigan to get credit for the taxes paid in. Look for an option when you work through the Michigan return to indicate that the pension income isn't taxable there.
