How do I designate an inherited annuity was from a nonqualified plan when entering the 1099R into Turbo Tax?

[JohnB5677]

To designate an inherited annuity from a nonqualified plan you would Go to:

The 1099-R may have a 4 of 7 in Box (7)

If it's a 4 it represents the decedent's death.

If it's a 7 it's a normal distribution

1. Wages & Income
2. IRA, 401(k), Pension Plan Withdrawals (1099-R)
3. Select your plan
4. Continue through screens until you get to the input screen
5. The IRA/SIMPLE/SEP box should not be checked
6. Continue the interview
7. Where is your distribution from?  None of the above
8. What kind of retirement plan do you have with XXXX? = Non-qualified plan
   1. Includes life insurance policies, private or purchased commercial annuities, and military retirement plans

[tcoryell333]

Thank you so much for your reply. When following your instructions step 7. The program asked about RMD's instead of where is this distribution from. I entered none was and RMD, giving me no other options to enter nonqualified? 

[dmertz · Accepted solution]

The payer should have included code D in box 7 if the distribution was from a nonqualified annuity is generally sufficient for TurboTax to treat it as such.

[TXJJ]

Using TT Home and Business 2024.  I have same problem.  The program has no place for me to say it is a non qualified plan.  Asks if Box 7 is checked.  I say NO.  Next the program asks about public officer.  That is a No.  Then TT wants to know if deceased was born before or after Jan 1, 1952.  Next screen asks if it is a 403(b) plan.  I answered NO, It's another type of qualified retirement plan.  There is not a place on the interview or the form to state it is a non-qualified plan.  Just wants to know how much RMD was distributed........  Can't get past this to get rid of errors on return.  

[MarilynG1]

All employer-sponsored retirement plans are subject to RMD, even if inherited, if the plan owner was of an age to be subject to RMD.  As the beneficiary, your plan administrator should make sure RMD is included in your distribution. 

When TurboTax asks, choose 'all or part of this distribution was RMD' and enter the RMD amount as equal to or less than the distribution amount.

Here's more info on What is RMD? and RMD FAQ's.

@TXJJ 

[1948biddle]

I do not see an answer that actually works to resolve the question "How do I designate an inherited annuity was from a nonqualified plan when entering the 1099R into Turbo Tax?"  As stated by someone else previously, when entering the 1099R info, the TT interview ultimately takes you to a window that asks "Was This Distribution From a 403(b) Plan?" You are required to pick from one of two choices: 1. "Yes, this is a 403(b) plan" or 2. "No, it's another type of qualified retirement plan".  Neither answer is true.  The correct answer is "the distribution (annuity payment) is from a NONQUALIFIED PLAN." How do I designate that?

Thanks for your help. Tedd

[1948biddle]

Please help. I'm stuck and can't move forward.

Thanks, Tedd

[TXJJ]

It is not an employer sponsored annuity.

[TerriLa]

Having the same problem.  TT keeps taking me to the question of it being a distribution from a 403b or other qualified plan.  Mine is an inherited non qualified annuity, which is why I entered 4D in the distribution code.  I tried calling TT and all the person could do was say he would refer it to their IT department.  Who knows what will come of that, if anything.

[MarilynG1]

All 1099-R's are entered the same way, and the income is taxed the same.  It's still a retirement plan, whether it was yours or someone else's, whether it's employer sponsored or not. 

It's the Codes in Box 7 that designate different types, as well as the follow-up questions in TurboTax.  If the annuity was purchased with after-tax funds privately, the amount in Box 2a would show the taxable amount. 

Here's more info on Inherited Annuities and detailed info on Form 1099-R.

@TerriLa 

@TXJJ 

@1948biddle 

[TerriLa]

The code entered in box 7 is not bringing up the correct follow up questions.  That is the problem.  

[1948biddle]

MarilynG1: You are not answering the question TerriLa and I asked.  If you are, it's over our heads. TT requires you to pick from one of two choices: 1. "Yes, this is a 403(b) plan" or 2. "No, it's another type of qualified retirement plan".  Neither answer is correct.  The correct answer is "the distribution (Nationwide annuity payment) is from a NONQUALIFIED PLAN." Do I check box 1 even though I know it is incorrect?  Or do I check box 2 even though I know it is incorrect? Can you tell us specially what steps and boxes we should check to get past this? Or is it like TeriLa suspects - box 7 when coded "4D" is not triggering the correct follow up questions?  We really need your step-by-step help on this. It is appreciated. Thanks.

[susieluhu]

Following - I'm having the exact same problem. I inherited a share of my mom's NQ annuity and TT is asking me about RMDs, which don't apply. Can't get past it.

[SusanY1]

Please ensure that both Box 7 codes - 4 and D are entered into the area for Box 7 distributions.  This should eliminate the RMD questions.  If it doesn't, please delete the 1099 and re-enter it, ensuring that both codes are entered.  (Sometimes prior answers will get "stuck" and deleting and re-entering should fix this problem. 





@TerriLa 
@1948biddle 
@susieluhu