Form 8606 is not used to calculate the taxable portion of a
pension distribution, it is used for IRAs.
When you enter the information from the Form 1099-R
reporting the pension distribution, enter it just as the form was
received. There will be a series of
follow-up questions that you will answer where you will be able to enter the
employee contributions and other information in order to determine the taxable
amount of the distribution.
You will see questions such as whether the distribution came
from a qualified plan, whether you received periodic payments, whether you
began to receive the payments in 2017, and that you need to figure out how much
of the distribution is taxable.
You will then see a screen where you can enter the annuity
start date, the plan cost, the number of months received in 2017, and the death
benefit exclusion. The plan cost is where you will enter the
amount of employee contributions
that were made. All of this information
together will be used to calculate the taxable amount of the distribution.
Be sure to keep the information about the plan cost/employee
contributions in your records.
