I had a TurboTax Online customer yesterday who I worked with at length trying to ascertain why the questionnaire in 1099-R section kept asking her if she "inherited this IRA" and was this 1099-R "from someone who passed away."
A little background: The customer was unable to share a screen on their phone or their laptop, so I was "working blind," if you will. That being said, the customer had previously filed their return this year but neglected to file a 1099-R for their husband (very much alive) who has a disability pension from the LAPD. When they entered their info while amending their return, she neither recalled any question in the interview that would indicate that this was "inherited," nor that her husband was deceased in My Info.
I'm having trouble understanding how TurboTax would trigger these questions since the husband was named as the person on the jointly-filed return who the 1099-R belonged to as well as it being a pension with regular payments (not a one-time distribution).
Solutions that we were able to try were:
- Deleting and re-entering the 1099-R
- Changing fields in the form from zero to blank and vice-versa
- Changing the device the customer was using (iPhone and a Windows laptop running Windows 7) neither of which was successful in solving the issue
There were other things I would've been interesting in trying, including deleting all the 1099-Rs and re-entering as well as going over their My Info to ensure that the husband was not entered as someone who had passed away. Other than that, I am out of ideas on how to get out of the Check This Entry loop.
It sounds like the customer mistakenly checked the IRA/SEP/SIMPLE box when she entered the 1099-R in TurboTax. That would indicate that the payment was from an IRA, not a pension. The program would not ask whether a pension was inherited.
If the IRA/SEP/SIMPLE box is checked on the actual 1099-R form, then either the form was filled out incorrectly by the payer, or the form is not for what the customer thinks it's for. It's for an IRA distribution, not a pension.
If she did properly indicate that the 1099-R belongs to her husband, TurboTax is not asking whether she inherited it. It's asking whether her husband inherited it from someone else. The question has nothing to do with whether he is alive or deceased.
It also depends on the box 7 code - if a 4 then it *is * inherited. If not 4 then whose SSN and name is on the 1099-R? If *hers* and not a code 4 then it has been transferred to her own IRA and is no longer treated as inherited so she answers no to the question. If the name and SSN is her deceased spouse then the payer was not notified of the death and the payer needs to be contacted to issue a corrected 1099-R