Solved: Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year
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bonappi
New Member

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

 
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macuser_22
Level 15

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

I assume that you received monthly payments, some before and some after your birthday.

"Splitting" a 1099-R is a situation that TurboTax does not support so you must do it yourself.

Figure out how much pension was received before and after your birthday and enter those amounts on two separate CSA-1099-R entries, with all boxes the same but the amounts adjusted for before-and-after birthday so the two total the original.

Then the before birthday amounts will go on line 1 on the 1040 as wages and the after will go on line 4 as pension as you enter each one and answer the age question as before the age and after the age.

The fact that you entered it as two 1099-R's does not go on your tax return, only the total values do, so as long as they add up to the same amounts as on the original CSA-1099-R it makes no difference.

Be sure to choose the CSA 1099-R type and not just a 1099-R since the boxes are different.

BTW: this will only make a difference if you qualify for some credit based on the amount of earned income which is the reason that before amounts are reported as wages since disability pay is a wage replacement until retirement age is reached.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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7 Replies
MichaelL1
Level 15

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

You are not subject to early withdrawal tax of 10% correct?  you just took an early out, right?  The answer to that question does not matter in your case, as there is no 10% penalty for early withdrawal.
macuser_22
Level 15

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

Is box 7 on your 1099-R a code "3"?
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
bonappi
New Member

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

Yes it is code 3 disability
macuser_22
Level 15

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

I assume that you received monthly payments, some before and some after your birthday.

"Splitting" a 1099-R is a situation that TurboTax does not support so you must do it yourself.

Figure out how much pension was received before and after your birthday and enter those amounts on two separate CSA-1099-R entries, with all boxes the same but the amounts adjusted for before-and-after birthday so the two total the original.

Then the before birthday amounts will go on line 1 on the 1040 as wages and the after will go on line 4 as pension as you enter each one and answer the age question as before the age and after the age.

The fact that you entered it as two 1099-R's does not go on your tax return, only the total values do, so as long as they add up to the same amounts as on the original CSA-1099-R it makes no difference.

Be sure to choose the CSA 1099-R type and not just a 1099-R since the boxes are different.

BTW: this will only make a difference if you qualify for some credit based on the amount of earned income which is the reason that before amounts are reported as wages since disability pay is a wage replacement until retirement age is reached.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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bonappi
New Member

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

Thank you. In my case it doesn't make a difference to Federal, but it does make a difference to my State taxes
RBBrittain
Level 8

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

@macuser_22 Yours is the first answer I've seen to specifically address the issue of "splitting" a disability 1099-R between before & after minimum retirement age, which is an issue I expect to run into this year. (TurboTax claims to have a help topic on this issue, but it's one of those help topics that did NOT carry over to the IRS Free File version which I use.) My question to you is, will this work for ordinary 1099-Rs (like mine from Arkansas Public Employees Retirement System), or just the specialized 1099-Rs (CSA 1099-R, RRB-1099R, etc.) Aggregation of amounts may apply to the specialized 1099-Rs, but it's less likely to apply to the regular one.

 

@bonappi It probably isn't an issue for you anymore (only in the year you reach minimum retirement age), but can you confirm whether or not it ACTUALLY makes a difference on your state return? The distinction between different types of retirement may be different for state purposes than Federal purposes; my state (Arkansas) treats both disability & regular retirement as qualifying for the state exclusion of $6,000 in "employer sponsored pension plan" income (over & above any basis exclusion) as the IRS distinction in Arkansas only affects the occasional basis exclusion, which (with some exceptions) is same as Federal -- Arkansas currently has no state EITC. (I actually had to get TurboTax to fix this issue for Arkansas some years back.) The taxation of 1099-R income in your state is usually determined by follow-up questions after entering your 1099-R; for Arkansas taxpayers the relevant question for "employer sponsored pension plans" appears in the follow-up section *before* the minimum retirement age question.

macuser_22
Level 15

Csa 1099r How do I answer was pension received before minimum retirement age if I reached that age during the tax year

@RBBrittain  You would only use that approach if you were receiving monthly pension payments and the 1099-R has a code 3 in box 7 (disability).   That is the only case when the "retirement age" question even comes up.    About the only reason to do this would be if the Federal or State would qualify you for EIC if the pension amount for those payments received prior to retirement age would affect the amount of EIC.  (if it makes no difference then there is not reason to do it.)    Either way the pension income is taxed as ordinary income and added to the AGI.

 

There might be other nuances but treating pension as earned income for EIC is the only one I can think of.

 

Note also,  if 1099-R box 4 (or state) tax was withheld then the IRS will receive a copy of the TurboTax 1099-R that you enter and they might question two 1099-R's.   I would print and mail the return with an attached explanation as to why it was split.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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