Doing Mom's taxes this year, specifically for state of Virginia, and confused by the Death Benefit. It states that it must be a lump sum; however, mom receives monthly payments and has a 1099-R (Statement of Survivor Annuity Paid) from OPM that shows the gross distribution in box 1, but 2a says "Unknown." This is classified as a death benefit (box 7 shows code 4). Federal taxes were withheld but not state taxes. Can I put the gross distribution amount from box 1 down as a death benefit or do I keep it at zero? It's the difference between her owing $0 or having to pay over $700 in taxes. Thanks for any help you can lend.
