My wife worked for the federal government early in her career and qualified for a small federal pension. She received payments until her death in 2019. Since then, I’ve received payments as her beneficiary.
Since her retirement contributions were after-tax, I can deduct a portion of the payments I receive.
In TurboTax there’s a worksheet associated with the 1099-R form, called “Simplified Method Worksheet”.
Line 1 shows the “total pension received this year” ($6036),
Line 13 shows the “nontaxable cost” ($1327),
Line 14 & 16 shows the “taxable pension for year” and “smaller of line 14 or 15” ($4709). This is the number that should be used on my Form 1040. But instead, TurboTax uses the “total pension” amount ($6023) as taxable.
Can you tell me how to fix this?
