First it's important to determine if this actually qualifies as a pension for the Alabama (AL) exclusion. Review the information below to decide.
If you do not fall into the category noted below, it should not be taxed to AL.
- You can enter it as though it was a 1099-R instead of a 1099-MISC. You would select to create a substitute form and use the information from your 1099-MISC to create it. Print the Form 4852 to file with your tax return and together they may need to be mailed.
- Once you are in the AL tax return you will see the screen 'AL Special Handling Of this Distribution. Answer 'Yes' and continue. Select your reason which would be Defined Benefit Plan 414(j).
Explanation for 1099-MISC:
A defined benefit pension is typically reported on Form 1099-R, but it may appear on a 1099-MISC if it represents miscellaneous taxable income rather than a standard annuity payment, such as a "retirement supplement". This often happens when employers provide additional funds, like health insurance reimbursements or specific, non-periodic payouts, that are not considered qualified plan distributions.
- Retirement Supplements: Additional income provided by a former employer that does not fall under standard annuity rules, often reported in Box 3 of the 1099-MISC.
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