dmertz
Level 15

Retirement tax questions

TurboTax ignores it because on a code 1, 2 or 7 Form 1099-R with the IRA/SEP/SIMPLE box marked the taxable amount is required to be determined on the taxpayer's Form 8606 when less than the full amount is taxable.  This makes the amount in box 2a of such a Form 1099-R essentially meaningless.  For a regular distribution from a traditional IRA, the IRS requires that the amount in box 2a be the same as the amount in box 1 to indicate that the distribution is usually fully taxable, so when the amount in box 2a is different from the amount in box 1, TurboTax simply treats it as erroneous and ignores it. 

 

(TurboTax does pay attention to a $0 amount entered in box 2a which TurboTax treats as a special indication that this is a nontaxable return of excess contribution after the due date of the tax return for the year for which the excess contribution was made, but that's an extremely rare transaction that requires the tax return to include an explanatory statement describing the return of excess contribution.)