Do you qualify for the general rule because you are age 75 or older?
If so, what age is reported with the software? In TurboTax Online, return to My Info in the upper left hand corner of the screen. Verify Birthdate that is reported.
You may qualify to allocate Total Employee Contributions (basis) under the General Rule. See IRS Publication 575 here.
Under the General Rule, you determine the tax-free part of each annuity payment based on the ratio of the cost of the contract to the total expected return. Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. To figure it, you must use life expectancy (actuarial) tables prescribed by the IRS.
Who must use the General Rule.
You must use the General Rule if you receive pension or annuity payments from a:
- Nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or
- Qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years.
More information
For complete information on using the General Rule, including the actuarial tables you need, see IRS Publication 939.
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