You are correct. In 2001 President Bush had signed into law the Fallen Hero Survivor Benefits Act of 2001 under P.L. 107-15. The law amended an inequity in the tax law regarding benefit dates. The law now allows all survivors to exclude the benefit from their gross income if the annuity is provided under a government plan.
However, the exclusion from gross income will not apply if:
- The survivor's actions were responsible for the officer's death.
- The death was caused by the intentional
misconduct of the officer or by the officer's
intention to cause such death.
- The officer was voluntarily intoxicated at
the time of death.
- The officer was performing his or her duties in a grossly negligent manner at the
time of death.
To enter the Form 1099-R into TurboTax as an exclusion from gross income, you will first enter the Form 1099-R as provided. You will need to:
- Select the Personal Income or Wages and Income tab
- Click the "I'll chose what I work on" button
- Scroll to Retirement Plans and Social Security
- Scroll and click Start next to IRA, 401K, Pension Plans (1099-R)
- Navigate through the screens to enter the information, then click Continue
To enter the benefit as an exclusion, complete Steps 1 and 2 shown above, then:
- Scroll to Less Common Income
- Click Start next to Miscellaneous Income Form 1099-A, 1099-C
- Scroll to Other reportable income and click Start
- Enter the description (e.g. Public Safety Officer Survivor Exclusion)
- Enter the benefit as a negative number (e.g. -20,000)
- Click Done.
The negative amount will appear on the Other Income Line 21 of the Form 1040 Schedule 1.
You will need to amend any prior year returns if the exceptions to the exclusion did not apply to your spouse's death, and the amount was included in your gross income as taxable income.
[Edited 04.07.19 |
3:37 PM]
