1099R Gross versus taxable Distribution Amounts are Different

[Inspectorth]

1099R Line 2 Taxable Amount is less than line 1 Gross Distribution. Turbo tax is asking "for the years you received these distributions, was the total amount shown on the form the amount you paid tax on? Then it shows "Total Amount" in larger font and then select Yes or No.   If you select Yes, then turbo tax uses the gross distribution as taxable.  If you select No, the next page then asks me which method did I use (simplified or general rule) to figure out the taxable portion of this annuity.  The issuer provided the taxable amount on Box 2a so I did not have to calculate it.  In prior tax year software, turbo tax asked if the taxable amount in 2a was correct and used 2a as the taxable amount if that is correct on the 1099 R.  Why is there a change? Is there an error in 2025 turbo tax?

[Inspectorth]

Adding --

On the 1099-R entry screen, Box 7 matches your form ; IRA/SEP/SIMPLE" box is unchecked; When the software asks, "Was this distribution from a 403(b) plan?", I selected "No, it's another type of qualified retirement plan."

Per a similar question -  this was posted - By selecting No, the software should treat it like a standard pension or 401k distribution and skip the "Annuity" questions entirely.

I did select no (this is a pension) and I still get those annuity questions.

[ReneV4]

If you have reached the annuity interview section and you have indicated "No" to the 403(b) plan question, follow these steps to bypass the annuity loop:

1. On the 1099-R entry screen, make sure Box 7 matches your form (likely Code 7 or Code 1)
2. Ensure the "IRA/SEP/SIMPLE" box is unchecked 
3. When the software asks, "Was this distribution from a 403(b) plan?", select "No, it's another type of qualified retirement plan"
4. On the "Annuity information" screen, select "No" to periodic payments
5. By selecting No in the above two screens, the software will treat it like a standard pension or 401k distribution and skip the "Annuity" questions entirely

[user17755971564]

My pension fund has always had Gross distribution, then a lesser taxable amount, with an employee contribution totaling the gross dist'n.  Before, a simple "Yes, this is correct" was asked.  Now, when asked "For the years you received these distributions, was the total amount shown in the form the amount you paid tax on?", it does not specific what the TOTAL AMOUNT refers to. I've trashed and re-entered the information.  If I say "NO", it wants me to enter how the calculation was made?  This is the first time in 26 years I have encountered this.

both boxes are unchecked in 2b, Dist'n code=4, IRA/SEP/SIMPLE is not checked.

[SteamTrain]

@user17755971564 

Yeah, they changed the wording this year...you need to answer YES:

I have a 1099-R with box 2a a bit lower than box 1 too....A YES uses box 2a.

____________________________________

If your box 2a has a non-zero number in it..(not blank, nor marked as undetermined), and that number is somewhat lower than the box 1 number, due to an after-tax contribution amount that is noted in box 5...then edit that retirement form again, and when you get to the following page (below), answer it as-if the displayed edits were present  (i.e. you needed to answer YES).  

Answering YES will use the box 2a $$ amount on your for 1040.  Checking lines 5a and 5b on your form 1040, before and after entering that 1099-R, and the 5b amount should be lower than line 5a. 

 (But if you answered No, and already entered some $$ in the "General" or "Simplified" calculation area ,you might need to delete your 1099-R first and re-enter it from scratch..)

__________________________

[user17755971564]

I tried trashing and re-entering, but still got the annuity questions.  I finally answered "Yes" to the amount, even though it didn't show what amount it referred to.  Once all income was entered, the question about the different amounts was asked as to it's correctness, as was always done in the past as it was entered.  The summary showed everything correctly. with the taxable amount being correct.

Thanks for replying.