You are correct, since your father died in the year prior to the
proceeds being paid out, the proceeds are not subject to FICA taxes.
They are taxable as ordinary income. To enter in TurboTax Online, while
logged in to your account and in your return:
- Type "Form 1099 Misc" in the search window and hit enter
- Click on "Jump to Form 1099 Misc"
- Answer "Yes" to Did you get a 1099-MISC?
- Enter the information from your 1099-MISC
- Enter a description such as "Inherited Deferred Comp"
- Mark choice "none of these apply" for "Does one of these uncommon situations apply?"
- Indicate "No, it didn't involve work like [your] main job.
- Continue with the interview, and your income will appear as ordinary income not subject to self-employment tax
