Recently retired. Rolled over two 401(k)s to my IRA. I did received 1099-R's. Turbotax says this puts me grossly over my allowed maximum income even though I didn't see a cent.
It depends. If your 401(k) was funded with pre-tax dollars, and you rolled the 401(k) into a Roth IRA (or if the roll over was considered taxable as any other reason). You need to see what code was on the 1099-R, if it has code 1 on it, then yes it is considered a taxable event.
Under Obama Care the income calculation for Premium Tax credit includes the following:
· Earned Income
· Wages, salaries, tips
· Self-employment, business and farm income after deduction of business expenses (including depreciation and capital losses)
· Unearned Income
· Interest (taxable and non taxable)
· Social Security (SSA) income
· Taxable state income tax refunds and credits
· Portion of scholarships, awards or fellowship grants used for living expenses
· Alimony received
· Capital/other gains
· IRA distributions (taxable amount only)
· Pensions and annuities
· Rental real estate income and royalties
· Unemployment Compensation
· Other income if taxable (such as prizes, jury duty pay not given to employer, etc.)
If your IRA distributions are non-taxable then they would not count towards the income.
If this isn't the case, then it could be that the 1099 code is wrong and needs to be corrected. You can get in touch with your old 401(k) companies and work with them on getting it corrected, OR the information that was entered into Turbo Tax could be incorrect. Go to the 1099-R section of the program and make sure the correct codes are entered.