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conovers
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If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?

 
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7 Replies

If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?


TurboTax doesn't require RMDs, the IRS does.  If you receive a monthly check, that is the RMD required.
conovers
New Member

If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?

Not true . the IRS does not require RMDs for defined benefit pension plan w monthly payments ... the TurboTax experts have mis-read / mis-understood the IRS regs on this; if it were true someone would be able to answer my question about how the RMD is calc'd;  for IRAs the calc is based on prior year end balance, life expectancy from IRS table, and IRS prescribed formula  ----- what would be thre year end balance for my defined benefit plan ???

If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?

That certainly is true.   Defined benefit plans require RMD's as specified in § 401 of the tax code.   The year end balance only applies to IRA's.   The defined benefit plan RMD's must be calculated by the payer and divided into equal payments to meet the RMD requirements as defined in the tax law.

Here is a small portion or the tax code:

[quote]
§ 1.401(a)(9)-6 Required minimum distributions for defined benefit plans and annuity contracts.

Q-1. How must distributions under a defined benefit plan be paid in order to satisfy section 401(a)(9)?

A-1.

(a)General rules. In order to satisfy section 401(a)(9), except as otherwise provided in this section, distributions of the employee's entire interest under a defined benefit plan must be paid in the form of periodic annuity payments for the employee's life (or the joint lives of the employee and beneficiary) or over a period certain that does not exceed the maximum length of the period certain determined in accordance with A-3 of this section. The interval between payments for the annuity must be uniform over the entire distribution period and must not exceed one year. Once payments have commenced over a period, the period may only be changed in accordance with A-13 of this section. Life (or joint and survivor) annuity payments must satisfy the minimum distribution incidental benefit requirements of A-2 of this section. Except as otherwise provided in this section (such as permitted increases described in A-14 of this section), all payments (whether paid over an employee's life, joint lives, or a period certain) also must be nonincreasing.
[end quote]

You can explore the legal language in §401(a)(9 further for more on this.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
conovers
New Member

If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?

OK .......... so does that mean that TurboTax has been coded wrong for the last 10+ years I'm using it,  since (as far as I can recall) it had never asked whether my pension payments were RMD ?

If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?

If the date of birth entered  in the personal information section indicated that you are age 70 1/2 or older then if entering a 1099-R (other than a direct rollover) will always ask the RMD question and has for years.   (Even though there is no reason to do so.)
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?

Virtually all pension plans in existence today fall under section 401 of the tax code and they all require RMD's after age 70 1/2.  The question is just to be sure that the requirement was met.  If you receive periodic (monthly) payments from any pension plan you can be assured that the custodian of the plan is meeting the requirements so you can safely answer "yes" to the question.

The answer to the question does not go on your tax return, it is simply to make sure you do not owe any penalty for not taking the RMD or use it for an ineligible rollover.

https://ttlc.intuit.com/replies/3302117

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
conovers
New Member

If RMD required for defined benefit pension plan monthly payments as TurboTax is requiring, how is it possible to calculate the RMD ?

I don't think RMD applies to defined benefit (traditional) pension plans.   I believe the TurboTax experts have mis-read / mis-understood the IRS regs and have caused the program coding to be incorrectly asking about RMD for such plans.

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