Retirement tax questions

The error occurs because the Teacher Retirement System of Texas (TRS) is a qualified pension plan, not an IRA, but your entries in TurboTax have incorrectly flagged it as such. The Simplified Method is used to calculate the taxable portion of a pension or annuity, but TurboTax blocks this method if the IRA/SEP/SIMPLE box is checked, as IRAs use different tax rules. 

To resolve this, you must "reset" the 1099-R entry so the software correctly identifies it as a government pension. 

1. Delete the Current 1099-R:
   • Navigate to Federal > Wages & Income.
   • Find the Retirement Plans and Social Security (1099-R) section and select Edit/Add.
   • Click the Delete (trash can) icon next to the TRS Texas 1099-R.
2. Re-enter the 1099-R Manually:
   • Choose to Add another 1099-R and enter the data exactly as it appears on your printed form.
   • Ensure the IRA/SEP/SIMPLE box is NOT checked in TurboTax unless it is actually checked on your physical 1099-R from TRS. For most TRS pensions, this box should be blank.
3. Navigate the Follow-up Questions:
   • When TurboTax asks "What type of plan is this?", select Government Pension or Employer Retirement Plan, NOT IRA.
   • If TurboTax asks if the taxable amount in Box 2a is correct, and a number is present on your form, select YES. This allows TurboTax to use that amount directly and skip the problematic Simplified Method worksheets entirely.
   • If Box 2a is blank or marked "Undetermined," answering NO will then correctly trigger the Simplified Method without the IRA error.