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How to report 1099R income received by a special needs trust

Filling out a trust return for a special needs trust.  The trust received income from an annuity reported on a 1099R.  Where do I enter this on the Turbo Tax Business Trust tax information.
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Level 15

How to report 1099R income received by a special needs trust

TurboTax Business does not contain a screen dedicated to the entry of information from a 1099-R. 

In most instances, following the procedures outlined below will give you the correct result.

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Follow the steps below to enter the amount   on Form 1099-R (Box 2a) that is treated as ordinary income   :

1) Click the Federal Taxes tab and then click "Income".

2) Click the Start (or Update) button to the right of "Other income or loss".

3) On the Other Income page, enter "1099-R Box 2a" as the description (see first screenshot).

4) Enter the amount treated as ordinary income in Box 2a under "Amount" and click the Continue button.

5) Go into Forms mode (upper right side of screen). 

6) Under "Forms in My Return" (upper left side of screen), look for "Form 1041" and click that form.

7) Ensure that the Box 2a amount appears on Form 1041, Line 8, Other income. (see second screenshot).

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Follow the steps below to enter the amount on Form 1099-R (Box 4 - federal income tax withheld).   NOTE: The steps below presume you will allocate the withheld amount to the beneficiary(ies).


1) Look for "Int-Div Wks" in "Forms in My Return" (upper left side of screen).

2) If the "Int-Div Wks" is not present, then click "Open Form" (upper left), type "interest" in the search box, highlight "Interest and Dividend Worksheet", and click the Open Form button.

3) In the Part I-Interest Income section of the Interest and Dividend Worksheet (Int-Div Wks), enter the amount of the tax withheld in one of the boxes under the "Federal Income Tax Withheld" column. The total will be automatically generated. (see third screenshot).

4) You should now see a new form under "Forms in My Return" entitled "Tax Payments". Click the "Tax Payments" form so that it is visible on the screen.

5) In the Part II-Other Tax Payments section of the Tax Payments form, you should see that Line 1a and Line 1d both have the amount you entered as withheld (earlier in this process). Click Line 1c (Amount of Line 1a and 1b to allocate to beneficiaries) and enter the amount that appears on Line 1a. You should now see a "0" on Line 1d. (see fourth screenshot).

6) Check your 1041 to ensure that Lines 24-29 are zeroed out. 

7) Check your K-1(s) to ensure amounts on Line 13 (with a "B" code) appear. 

View solution in original post

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Highlighted
Level 15

How to report 1099R income received by a special needs trust

TurboTax Business does not contain a screen dedicated to the entry of information from a 1099-R. 

In most instances, following the procedures outlined below will give you the correct result.

---------------------------------------------------------------------------------

Follow the steps below to enter the amount   on Form 1099-R (Box 2a) that is treated as ordinary income   :

1) Click the Federal Taxes tab and then click "Income".

2) Click the Start (or Update) button to the right of "Other income or loss".

3) On the Other Income page, enter "1099-R Box 2a" as the description (see first screenshot).

4) Enter the amount treated as ordinary income in Box 2a under "Amount" and click the Continue button.

5) Go into Forms mode (upper right side of screen). 

6) Under "Forms in My Return" (upper left side of screen), look for "Form 1041" and click that form.

7) Ensure that the Box 2a amount appears on Form 1041, Line 8, Other income. (see second screenshot).

------------------------------------------------------------------------------------

Follow the steps below to enter the amount on Form 1099-R (Box 4 - federal income tax withheld).   NOTE: The steps below presume you will allocate the withheld amount to the beneficiary(ies).


1) Look for "Int-Div Wks" in "Forms in My Return" (upper left side of screen).

2) If the "Int-Div Wks" is not present, then click "Open Form" (upper left), type "interest" in the search box, highlight "Interest and Dividend Worksheet", and click the Open Form button.

3) In the Part I-Interest Income section of the Interest and Dividend Worksheet (Int-Div Wks), enter the amount of the tax withheld in one of the boxes under the "Federal Income Tax Withheld" column. The total will be automatically generated. (see third screenshot).

4) You should now see a new form under "Forms in My Return" entitled "Tax Payments". Click the "Tax Payments" form so that it is visible on the screen.

5) In the Part II-Other Tax Payments section of the Tax Payments form, you should see that Line 1a and Line 1d both have the amount you entered as withheld (earlier in this process). Click Line 1c (Amount of Line 1a and 1b to allocate to beneficiaries) and enter the amount that appears on Line 1a. You should now see a "0" on Line 1d. (see fourth screenshot).

6) Check your 1041 to ensure that Lines 24-29 are zeroed out. 

7) Check your K-1(s) to ensure amounts on Line 13 (with a "B" code) appear. 

View solution in original post