Military Pension being charged early withdrawal penalty.

[tracyecrider]

My husband and I have the desktop version.  When finished entering the 1099-R, and pressing the non-qualified button, the expected screen does not appear.  Usually, the next screen asks you to identify the non-qualified plan.  This year it goes to the Yes/No screen and asks are you taking payments before 59 1/2.  And then it tacks on another $1000 in owed taxes, making total owed taxes $3550.  On $7000+ taxable income.  Seriously?  You have a coding issue you need to fix.  The incorrect hyperlink from the non-qualified button needs to be fixed.

[DoninGA]

Pensions are not eligible for an early withdrawal penalty unless for some reason there is an incorrect code in box 7 of the Form 1099-R that you entered.  What is the code in box 7 of the Form 1099-R?

[tracyecrider]

I understand that.  It is Code 7.  It is a programming issue.  

[DoninGA]

A code of 7 is a normal distribution.  Delete the Form 1099-R and then re-enter manually to clear this problem.

[DoninGA]

However, if the retiree is under the age of 59 1/2 then the code should be a 2 in box 7 which indicates - Early distribution, exception applies (under age 59½).

If this is your situation then you need to get a corrected Form 1099-R from DFAS.

[tracyecrider]

*sigh*  So fourth time is going to be the charm?  I have already done that.  I have also unenstalled the program, reinstalled, and checked for updates for the 100th time.  I have even turned the computer off and then back on.  Because if something as simple as deleting would work, why not all the rest.  IT'S A PROGRAMMING ISSUE.  THE HYPERLINK ON THE "NON-QUALIFYING PLANS" IS BROKEN.  

[DoninGA]

@tracyecrider I just entered a Form 1099-R using the DFAS FEIN of  34-0727612 with a box 1 distribution of $30.000 and a box 2a taxable amount of $30,000 and Federal Income Taxes withheld in box 4 of $10,000.  Entered a code of 7 in box 7.  Completed entry of the Form 1099-R.

The following screen asked if the IRA/SEP/SIMPLE boxes was checked, answered No.

The next screen asked if the employment was from a Public Safety Officer, answered No.

The next screen asked if this was from a Qualified Plan, checked the box From a non-qualified plan

The following screen showed the amount paid from DFAS and clicked on Continue

The following screen asked if we took a Disaster Distribution in prior years or repaid a prior year distribution, answered No.

The program then takes you back to the Wages & Income screen.

No errors whatsoever.

This was all done using the 2023 TurboTax Premier desktop edition for Windows.

I cannot recreate your error.

[DoninGA]

Additionally, make sure that you have updated the TurboTax software to the latest release.

Click on Online at the top of the desktop program screen.  Click on Check for Updates