When you enter a pension payment. TurboTax asks if you received regular, periodic payments. When you answer Yes, TurboTax asks if this was the first year got these payments. If you answer Yes, to this, you'll have to answer "I'll specify the taxable amount" if box 2a is less than box 1, or indicate "I made no after-tax contributions." If you instead started receiving payments in an earlier year, next answer Yes that the amount in box 2a is the taxable amount.
If you mistakenly used the Simplified Method last year and your 1099-R form was transferred in from the previous year, TurboTax will retain the previously entered Simplified Method details, so you may need to delete and reenter the 1099-R.
Posts in this forum suggest that, because the nature of these questions (particularly the question that asks, "I need to figure out how much of this money I took out is taxable"), TurboTax tends to lead one to inappropriately use the Simplified Method and end up getting a tax bill for under-reported income.
Note that if all of the Simplified Method details are entered accurately, TurboTax should end up calculating the same taxable amount as is shown on the Form 1099-R, but it's extremely easy to get any one of those details wrong.
