Contributed pre-taxed $ to an Annuity, receiving monthly distributions for the second year. 2023 Box 2a showed no taxable amount. 2024 Box 2a shows a taxable amount. Why?

[Scherereng]

Form 1099-R

[SabrinaD2]

The change in the taxable amount on your 1099-R from 2023 to 2024 could be due to several reasons:

1. For non-qualified annuities, the taxable amount is based on the exclusion ratio. This ratio separates your investment return (non-taxable) from your earnings (taxable). Changes in the exclusion ratio can affect the taxable amount. Find out more about the exclusion ratio
2. Qualified Annuity: For qualified annuities, the entire distribution is usually taxable. The change might mean initial payments were your investment return, and now they're earnings.  More details on the IRS website
3. Cost Basis Recovery: Initially, you might have been recovering your cost basis (non-taxable). Once that's done, payments become fully taxable.. Learn more about cost basis recovery

IRS Rules and Regulations: Check the IRS rules

If you are referring to something else, reach back out.

[Scherereng]

Thank you!!!

exactly what I needed to know with #1