My husband gets a Pension payment each month from the Teamsters. It is not a 401K, or IRA. We have taxes taken out before we receive it. Is this considered a RMD?

[wondergram4]

His pension is a set amount for life.

[MargaretL · Accepted solution]

Yes, it is considered an RMD.

For pension distribution, the RMD is satisfied by simply receiving pension periodically.  Therefore, you may simply select "yes" to the RMD question (Was this withdrawal RMD and ALL of this was RMD).  You will also be asked if the amount reported is paid periodically in equal amounts.  By selecting "yes" the RMD requirements are met and you may continue with the tax preparation.

[Sprite836]

My dad receives 2 pensions -- TMRS and Teamsters.  He does not pay taxes on it.  They are not 401Ks or IRAs.  Should I still put yes to say if RMD -- and then select All.  Then it asked if it was converted or cashed out?  What is appropriate.  He is well over 70 1/2 years old.

[MayaD]

Answer yes to the RMD question.

Unless he turned around and contributed that money into an IRA or other retirement plan, he cashed it out.

[Opus 17]

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@Sprite836 wrote:

My dad receives 2 pensions -- TMRS and Teamsters.  He does not pay taxes on it.  They are not 401Ks or IRAs.  Should I still put yes to say if RMD -- and then select All.  Then it asked if it was converted or cashed out?  What is appropriate.  He is well over 70 1/2 years old.

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For any kind of traditional pension, where the payment is determined by age and service and payments stop at death, the plan is automatically assumed to meet IRS rules for RMDs. 

[wjsx]

When say YES to "The entire distribution was an RMD" and then it asks:

"From what you shared earlier, you received $xxxxx.00. If your total RMD for 2024 was higher than what you took out, there might be additional taxes to consider.

"Could you tell us what the required minimum distribution for your account was in 2024?"

If we put the 1099-R Box Gross Distributions amount  in there, that wouldn't be correct because We had Federal (box 4) and State (box 14) Income Withheld!!  As another Person in the Community asked, TT should Re-word this more Clearly, or maybe they do not understand, too??  Shouldn't we subtract the Federal and State tax amounts from the Gross Distribution amount to result in the "Required Minimum Distribution Amount" ???   Because we didn't receive that Total Required Minimum Distribution Amount if Taxes were Witheld from it !!!!  Other posts / questions, have not been answered clearly by the TT "Experts".  They say "Ask your Plan Provider" which is not helping!!

@LB641 

@smwgrw59 

@DMarkM1 

@JulieP 

@EncinoMan 

[VolvoGirl]

The tax withholding doesn’t matter or figure into it.  You received the full distribution in box 1.  Just that part of it went to withholding.   Like if you had received the full amount and made an estimated payment to the IRS.   The withholding was for you.  

[wjsx]

TBHonest, it still sounds like 'Fuzzy-Math", obviously I'm not a tax prof.!!  That follow-up question is either redundant, or it's how much the sum is minus Boxes 4 and 14 after Federal and State Taxes were Taken out.  Maybe I am being paranoid, thinking if I put the Full RMD amount under that question {again}, I will get hit with a higher Tax Rte somewhere later on because of it!! "Could you tell us what the required minimum distribution for your account was in 2024?"

[wjsx]

Maybe I am reading too far into it.  I guess the FULL RMD is the Amount AFTER the Fed / State Taxes were taken out????    LOL Thanks

[VolvoGirl]

The RMD is the amount you are required to take based on the previous year’s ending balance (so 2023 balance).  No it is not after the tax withholding was taken out.  The gross amount in box 1 is the actual amount that was taken out of the account.  Whether you got it or some went to withholding.   The withholding was for you.  

See IRS publication 590-B for IRA Distributions

https://www.irs.gov/pub/irs-pdf/p590b.pdf