@icky0 wrote:
Update: I'm still waiting to hear back from my plan administrator about why they left box 2a blank on my 1099-R, but I think this is still a TurboTax error. If you think about it, they really can say they can't determine the taxable amount as we can repay any part of the distribution after the 1099-R is created. In my case, reporting $30,000 as taxable income would be wrong. TurboTax should be able to handle a Covid distribution with a blank 2a.
And by the way, my box 5 is blank and this was not a periodic distribution.
The 8915-E line 7 instructions say:
[quote]
Line 7. Enter on line 7 your cost, if any. Your cost is generally your net investment in the plan. It does not include pre-tax contributions. If there is an amount in Form 1099-R, box 2a (taxable amount), the difference between Form 1099-R, box 1 and box 2a, is usually your cost. Enter the difference on line 7.If there is no amount in Form 1099-R, box 2a, and the first box in box 2b is checked, the issuer of Form 1099-R may not have had all the facts needed to figure the taxable amount. You may want to get Pub. 575, Pension and Annuity Income, to help figure your taxable amount.
[end quote]
"Your cost" is the box 1 amount minus any after-tax contributions you made to the 401(k) that should be on the 1099-R in box 5.
For a 401(k) there is no excuse for the employers plan administrator NOT to have all of the necessary information to determine the correct 1099-R box 2a amount. They are the ones that administrate the account and keep the records.
If the plan administrator refuses to issue a corrected 1099-R and you know the amount of after tax contributions you have made (it should be on your account statements), then you can prepare a "substitute" 1099-R in TurboTax exactally like the original but enter the amount of after-tax contributions (or 0 if none) into box 2a.
TurboTax will ask for a explanation of why you are filing a substitute and the steps you took with the plan administrator to get it corrected.
Without box 2a the entire box 1 amount is applied making the entire box 1 amount taxable in 2020.
"TurboTax should be able to handle a Covid distribution with a blank 2a." It does - it makes it all taxable. Just as it would if not COVID related. The 8915-E requires yiur cost amount on line 7 and that comes from box 2a.
**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.**
