My uncle passed away in 2021, and my mother was the beneficiary of his pension death benefit. The death benefit was a flat lump sum payment. Because it came from the pension office, she received a 1099-R for that one time payment with a code 4 (death benefit). When I put the 1099-R into turbo tax, it disqualified her Retirement Savings Contribution Credit saying that the distribution eliminates her credit. But she never took a distribution. Is the death benefit considered a retirement distribution?? Or is this an error in turbo tax?
