TurboTax wants to apply this Box 1 amount on Box 5 on 1040 as taxable. It does not ask additional questions to determine the true taxable amount. Another poster suggested using the Interactive Tax Assistant and to read Publication 525 which I have done. Both respond the same if you have paid more in premiums than what you receive as a payout it is not taxable. I just need to achieve this within TurboTax. Since TurboTax does not prompt through this situation the only way for me to remedy this is to put a Zero on Box 2a on the 1099-R.
