Error: TT will not allow you to eFile if a 1099-R does not have "Total Distribution" box checked and Percent field filled in

[jh777]

This might sound like an error, but is not.

The firm that had an inherited annuity provided me a 1099R.  The annuity was to be distributed to me and my sister, equally split 50%/50%.   The company was able to send the funds to me in 2024, but had difficulties fulfilling my sister distribution until 2025.

So my 1099-R correctly shows that I received my 50% of the annuity, which is the total annuity amount I was expected to receive, but that the overall annuity was not completely distributed until 2025.  I suspect this is required because there's a possibility the remainder could pass to me if my sister was unable to eventually receive it.

TT should still allow my taxes to be eFiled.   TT should maybe pose a question to understand that a situation like this could occur and allow the eFile to proceed if the response shows that this was not an error.

[dmertz]

Yes, this is an unusual situation where what is ultimately a total distribution spans two calendar years.

The IRS instructions for box 9a say that the percentage is to be entered if the distribution is a total distribution made to more than one person.  In this case, the distribution to you was not a total distribution and the payer should have left box 9a blank or it did constitute a total distribution and the Total Distribution box should have been marked by the payer.

I would probably just mark the Total Distribution box on TurboTax's 1099-R form.  The marking of the Total Distribution box really only has significance in the context of a lump-sum distribution from a qualified plan that qualifies for special tax treatment on Form 4972, for which this distribution would not qualify.

The other option would be to leave box 9a blank.  The percentage in box 9a has no bearing on the tax treatment on your tax return.

"I suspect this is required because there's a possibility the remainder could pass to me if my sister was unable to eventually receive it."

That's not a consideration for how Form 1099-R is prepared.  You would directly inherit your sister's portion only if your sister disclaimed within 9 months.