Thx for your reply. Confirmed what I thought. I have been trying to contact the employer for 2 months now to see if they were in error or if there was a possible exception to the non taxable status that I did not know about. No response until the day after I filed the return. TurboTax has a drop down menu for box 7 which does not include code 0. I am a volunteer for AARP Taxaide program which uses a different software that does allow code 0. So I filed with that software, putting in the 1099 as I had it and the death benefit was taxed. Figured I could amend once I finally heard from the employer. Their response was that they had made an error and I was sent a corrected 1099. This one shows no taxable amount, total distribution box checked, Sep/IRA box not checked and still code 0 in box 7. The IRA must have received the same correction, since the tax amount owed was adjusted to the correct (non taxable benefit) amount. I had put in an automatic debit request so I saw what was paid. Amazed that the IRS fixed so quickly, unless something happened because of the code 0 on the initial 1099. Once again thanks.
