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

[LACar]

Note that TurboTax asks whether the original owner of the deferred annuity had it as a 403B, or another qualified IRA.  It does not offer the option to say it was non-qualified.  After you are forced to choose one of the incorrect answers, the 1099R loops incessantly and keeps telling you to fix it, but you can't because of the lack of a non-qualified option. If this is your situation, you will not be able to efile through TurboTax.  Your best option is to file by mail.  ***Maybe*** they will fix this glitch before 4/15/25, or maybe not. 

[gannibal]

Having the same problems as the others who have posted, so this is not a unique or unusual issue.

As of today, March 12, 2025 the problem still exists.  TT has had enough time to fix it, since they have't by now, it looks like they will not, with just over a month to go until tax deadline.

The adviser suggested the file by mail solution.  Bad form, TT, Bad form.

[TerriLa]

I am in another thread with people having the same problem. It was suggested that you enter $0 for the RMD.  I did and it did not charge me the penalty.  When I got to the end and it checked for errors, it flagged the $0 and said I should not enter an amount.  I deleted it and continued on to the end.  I know my refund amount was correct this way because I had double checked everything through another income tax software program.  They both came up with the same final number.  I went ahead and e-filed last night and got the notice it was accepted.  Will see what happens now.  

It is a shame that TT has left it’s customers with this major issue to deal with.

[1948biddle]

At this point, I expect the only thing that will get Turbo Tax's attention is legal action. A class action suit would be nice.

[LACar]

They could at the very least send out a memo to all the people who answer the phones so that they could tell customers it's a known glitch, instead of having them demonstrate the "loop" that happens for an hour on a shared screen.  That wastes everyone's time!  

[Ann2retired]

March 13th - I called TT support again.  Shared screen with 1st agent.   Either she hung up on me or we were disconnected.   I called back and spoke to another agent and also did screen sharing.   He suggested entering only code 4 in box 7 and not entering the D.   The subsequent questions then allowed me to date of birth of person who died and RMD info.   This method did not identify nonqualified annuity.

March 14th - upon opening TT, there was an update to software to download.   It would not download.   Gave me error Microsoft Installer Error 1603.   Scanned my computer and re-started.   Continued getting error.

March 15th - finally able to go online and download update patch and get back into TT.   

I deleted 1099R at issue, saved file, closed TT, restarted, re-entered.

Questions have changed.   The 403B question is gone.   Now TT does not have the question to tell us when the person was born to know if RMD if person had lived as asked in 2023 and prior years.   Now no question to ask if this withdrawal was RMD some or all, how much RMD was taken all or part.

Now can enter code 4 D for death/ annuity payments from nonqualified annuities, but nowhere to tell TT that the RMD was taken.   I went to the 1099R summary page and overrode the RMD total at the bottom of the page to include this RMD.  The Form 1099R summary shows "keep for your records". 

Will TT update again to include RMD questions as in prior years?

[LACar]

I had a lengthy conversation with someone at Fidelity (where my non-qualified inherited 1099R was from) about this whole thing.  She told me this type of annuity does NOT have an RMD at all.  If TT asks for RMD for this fund, you should probably put 0.   If in doubt, call the financial institution that gave you the 1099R and ask them if this fund has an RMD.  But it sounds to me like you should NOT include your withdrawals from that particular fund in the RMD total.  I'm just a hapless taxpayer, so I don't have any particular training in this, but that was my experience, and the veteran TT person I spoke to at the end, Dale (Dale is great, by the way!!!), as well as the Fidelity annuity person, told me that was the correct way to do it.  

[xiaoli1]

As with others , I am stuck with not being given the correct option for a distribution from a non-qualified inherited annuity distribution.  Neither option is correct, Has anyone been able to find a solution?

[xiaoli1]

I am having the same problem did you find a solution?

[xiaoli1]

How did you obtain the patch for this issue? Everything suggested has been done and I am still being flagged and asked to review with no option for a NQ stretch inherited annuity.

[LACar]

I didn't get any patch.  I just selected file by mail at the end and sent it in.  

[Ann2retired]

When I could not get the TT update to install due to error, I clicked the link to manually update TT.    I found a link to it that may help you here Error 1603: "A fatal error occurred during installation or updating"

Once updated and able to go back into TT, I deleted the 1099R at issue and re-entered with its code 4D.   This nonqualified annuity for my husband was inherited in 2012 and his father had RMDs.    My husband opted for the lifetime stretch option that was available in 2012, thus he has RMDs.    Prior to 2024, TT asked for the date of birth of person who died and knew that as a beneficiary, RMDS were required and asked if it was taken in full or part and for the amount of RMD.   

Currently, with this update, the 403b or other qualified retirement account question is gone but the RMD questions are missing.    There is a question at end of entering all 1099Rs that asks if all RMDs have been taken.   I checked this to indicate all had been taken.   

I have not filed my returns in hopes TT will add the proper RMD questions back as in 2023 and prior years.   I am concerned about filing without being able to specify amount of RMD taken for this specific 1099R with nonqualified annuity.  

[dmertz]

I'm seeing that the bug has been fixed in the desktop version of TurboTax but not in the online version.  However, something about the update process for the desktop version seemed to be broken today when I tried to a normal update, so I had to do a manual update instead:

https://ttlc.intuit.com/turbotax-support/en-us/help-article/update-products/manually-update-turbotax...

[PatriciaV]

The RMD entry process for TurboTax Online is scheduled to be updated on Thursday, March 20, 2025. Because updates are released after business hours Pacific time, we recommend waiting until March 21 to review the 1099-R section again.

@BSCOTTWHILL 

@LACar 

@gannibal 

@TerriLa 

@1948biddle 

@Ann2retired 

@xiaoli1 

@dmertz 

@tcoryell333 

[Ann2retired]

Will the software for Turbo Tax Home and Business desktop be updated to correct for RMD information on March 20 at same time as the online version?