1099-R

[sdasilva18]

My 21 year old son worked at a place that offered a 401K. He worked there for only about 6 months in 2019 and then moved on to another job. He received a 1099-R that has an amount in box 1 and 2a and the Distribution Code is a 1.  I really don't know where the $ went after he left this job. If it rolled into a retirement account or he received a check from T. Rowe. I have no clue.  I did include it in Turbo Tax and checked off the "other" box when it asked me what he used the money for.  How does this affect anything for him? He didn't make much money in 2019 (he is a full time student too) and somehow didn't have any Fed Tax deducted. Turbo Tax is also asking me to complete form 8615, Tax for Certain Children who have Investment Income.  Is this because of the 1099-R form?

[macuser_22]

He must report that on his tax return.  The box 2a amount is taxable income and also subject to a 6% early distribution penalty.   Failure to report it and pay the tax will result in a  IRS audit letter in about a year. 

The 1099-R indicates that the money was distributed to him.  If he never received it then contact the 401(k) trustee.

[ColeenD3]

Yes, it is. That income is unearned and he is age 21 and a student.

Tax for Certain Children Who Have Unearned Income

Use Form 8615, Tax for Certain Children Who Have Unearned Income (PDF) to figure your tax on unearned income over $2,200 if you're under age 18, and in certain situations if you're older (see below). Attach Form 8615 to your tax return if all of the following conditions are met.

1. Your unearned income was more than $2,200.
2. You meet one of the following age requirements:

• a. You were under age 18 at the end of the tax year,
• b. You were age 18 at the end of the tax year and you didn't have earned income that was more than half of your support, or
• c. You were a full-time student at least age 19 and under age 24 at the end of the tax year and you didn't have earned income that was more than half of your support.

1. At least one of your parents was alive at the end of the tax year.
2. You're required to file a tax return for the tax year.
3. You don't file a joint return for the tax year.

Form 8615

[sdasilva18]

The amount on the 1099-R was only $116. He still has to complete that form?

[JotikaT2]

No.  His income level of $116 is below the $2,200 threshold required to file Form 8615.

Form 8615 - Tax for Children with Unearned income

[sdasilva18]

One last question.  It is asking me Where is this Distribution From?  T. Rowe Price

Select the source of this distribution and enter any other North Carolina information.

Bailey, Faulkenbury or Railroad Retirement

I clicked None of the above

Then it says:

NC Distribution amount =

NC Withholding =

Payer's NC State ID No.

I entered all that from the 1099-R form on the page before.  Am I having to enter it again above?

[DianeC958]

You just need to enter the amount of the distribution for North Carolina which is the same as the Federal and if any tax was withheld for North Carolina.

Sometimes the distribution amounts can be different for Federal and State.