PERIODIC PAYMENTS

Forum|Forum|3 years ago
April 9, 2023
2 replies
12 views

Under personal income, we have a 1099-R from Office of Personnel Management.

It shows Gross distribution. I entered all that but next page asks: ANY PERIODIC PAYMENTS?

I'm confused.

Answer is YES if we got distributions, correct?

Why does it ask this when previous page has the 1099-R amounts entered?

Is this something else?

TurboTax Home & Biz Windows

DanaB27

Level 15

You will answer yes, if you received payments on a regular basis, such as weekly, monthly, quarterly, or annually. Please see dmertz great explanation below.

If you are younger than 59 1/2 and getting equal periodic payments then you qualify for an exemption from the 10% early withdrawal penalty when you enter them on the "These Situations may lower your tax bill" screen. Please see What Is a Substantially Equal Periodic Payment (SEPP)? for additional information.

[Edited 4/10/2023 | 4:35 am PST]

@Gamze

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GamzeAuthor

Level 3

Thank you. We are in our 60's so I am going to say Yes and go on. I really appreciate your answer. Happy Easter!

dmertz

Level 15

This question that TurboTax is asking has nothing to do with early-distribution penalties. TurboTax is asking in case the amount in box 2a of the Form 1090-R is not correct and you have after-tax basis in the plan. If you received periodic payments (in the form of an annuity), have basis in the plan and the taxable amount in box 2a is incorrect or not determined, you must use the Simplified Method to calculate the taxable and nontaxable amounts. If box 2a is correct, which it should be box 2b Taxable amount not determined is not marked, you should not be using the Simplified Method. If you have no after-tax basis in the plan, you should not be using the Simplified Method.