@icky0 wrote:
@macuser_22
Bingo. My form 1099-R has a blank box 2a and box 2b is checked that taxable amount could not be determined. When I put $30,000 in box 2a and uncheck 2b, TurboTax correctly calculates that none of the distribution is taxable income for 2020. This tells me that the calculation only works if the financial institution managing my retirement has an entry in box 2a and unchecked 2b. TurboTax cannot properly handle the scenario where a taxable amount was not reported on 1099-R.
Glad I caught the error. When TurboTax calculates correctly I get a $3000 refund. When TurboTax calculates wrong I owe $9000.
A blank 2a and not determined checked means the plan administrator could not determine the taxable amount. That usually indicates that either you have a non-taxable "basis" in the 401(k) that the administrator does not know about or it is a equal periodic payment. Your "basis" that the plan administrator knows about should be in box 5.
If you are receiving equal periodic payments (like monthly) from the 401(k) that turns it into pension treatment which is not eligible for the COVID exceptions.
Before changing the 1099-R you should talk to the plan administrator and find out why the box 2b (not determined) is checked for a 401(K) distribution. If incorrect then they must issue a corrected 1099-R.
You cannot change it since the IRS receives a copy form the plan administrator and what you report must match.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
