Generally, yes, pension payments are taxable income. TurboTax will figure the tax, all you have to do is enter the information from the form. You can leave 2b blank and unchecked.
A qualified retirement plan is one that is sponsored by an employer for the exclusive benefit of employees. These plans follow special IRS rules and qualify for special tax treatment, such as deferring paying taxes on the contributions until retirement. Qualified plans include:
- 401(k)s
- 403(b)s (also known as "tax-sheltered annuity plans")
- SEP and SIMPLE plans for employees of small businesses
- Pension plans
- Profit-sharing plans
- Stock bonus plans
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