My husband is a retired public safety officer who is receiving monthly distributions before the age of 59 1/2. The pension is from a trust and the monthly payments are for our joint lives and began after he separated from service. According to the instructions on Form 5329, he falls under exception #2 "Distributions made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the
joint lives (or joint life expectancies) of you and your designated beneficiary (if from an employer plan,
payments must begin after separation from service). I also reviewed Publication 575 (2021) and it also mentions the same exemption on page 35. What do I need to do so that I can apply this exemption and the 10% tax is not automatically added to the pension taxable amount?
Effective for distributions after December 31, 2015, the exception for public safety employees who are age 50 or over is expanded to include specified federal law enforcement officers, customs and border protection officers, federal firefighters and air traffic controllers. Also, the restriction that only defined benefit plans qualify for the exemption is eliminated. Thus, an exemption is allowed for distributions from defined contribution plans or other types of governmental plans, such as the TSP. See IRC Section 72(t)(10), as amended by the Defending Public Safety Employees’ Retirement Act, P.L. 114-26.
Box 7 has a distribution code 2 and Box 2a has a taxable amount of 59,571.48. On my 1040, the taxable amount (line 5b) is 82,097.00
Do you have other pension income? If there is other retirement income, if so, this is a combination of all income together.
No other pension income was provided. This increased taxable amount is what triggered the question of this posting.
Delete your public safety officer pension. Close your TurboTax return. Next clear the cache and cookies.
Open your return in TurboTax and enter the Form 1099-R again and make your selection. Preview My 1040 to review the pension amount on your Form 100.