The software asks that question, because it doesn't know if the 1099-R is for a Police officer... BUT, IF there are $$ in box 5 that went to health insurance, then up to $3000 of the distribution will not show up as being taxable income on the Federal 1040.
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BUT the statement :
@Peggymom wrote:
I was told by SS when I signed up that since my 1099-r was from a public service (police officer) that there would be no IRS tax on my SS, but only a change in my SS payment if I made to much money ie w2. .....
...you may have misheard...or the person you talked to at SS fumbled things in that part I underlined.
There is no such exemption in a Federal tax return for not including that 1099-R distribution as income for determining IF some of your SS is going to get Federally income-taxed (But I haven't thought about if it is a Disability pension...that might be different...box 7 would contain a code 3) . Some state tax returns will exempt it from the state income tax, but not the Feds.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
