Federal Pension, general rule or none of the above

[wvhughes1]

I recently retired from the federal government under the CSRS plan and live in NJ. My 1099-R has my gross distribution in box 1 and taxable amount in box 2a. Box 7 distribution code is 7. Turbotax asks "Where is this distribution from". It is not military or disability, and I do know that my contributions are used as part of the distribution for many years (more than 3) so it is not Three-year rule. I am not sure if I am supposed to use General Rule or None of the above.  Checking any box does not change my federal refund, but it does make a difference for state. Three Year or General are both the same, but does not put a number on line 20a (taxable pensions) on the NJ tax form, giving a larger refund. Looking at the pensions worksheet, part D lines 1 and 2 are not filled in. I have the number for line 1 (Contributions made to the plan, from box 9B of my 1099R), but I have no idea what to put for line 2, expected return on contract.  I did call the federal office of personnel management for the info, but they did not know. Checking None of the above (that was the default box checked) puts my 1099 taxable amount on line 20a and gives a smaller refund. I thought I was supposed to use general rule, but it seems wrong that line 20a is not filled in with my 1099-R box 2a, and I have no info for the worksheet line 2.

[DaveF1006 · Accepted solution]

It depends. Line 2 refers to the anticipated rate of return on investments related to the pension fund or contract. It is a percentage figure that reflects how much the pension plan is projected to earn over time based on the investments it holds.

This is something that only a plan administrator knows because you are not expected to have this information on your own. 

If there are disclosure statements that came with your 1099R, view these to see if this mentioned anywhere in these statements. Sometimes it could be listed as a footnote in the statements. This is critical information that determines your taxable income based on either the three-year rule or general rule.

If you do not have this information, you will select none of the above as you mentioned and the taxable amount that is determined  is correct.

[wvhughes1]

DaveF1006, explained perfectly, Thanks!