Form 1099-R Box 2a blank

[dandrhuff]

I entered a death 1099-R as received, and answered the follow up questions during entry. TT is correctly counting the about in Box 1 as taxable. However during the Smart Check, I am getting the following response:

Form 1099-R (..Bank) Taxable amount must have a value, even if zero. Box 2a (enter a value). Box 2b is checked.

Why is Smart Check giving me an error?

TIA

[JohnB5677]

1099-R inheritance tax treatment depends on whether it was inherited from a spouse or not.

When you receive a distribution from an inherited IRA, you will receive a 1099-R, with a Distribution Code of '4' in Box 7. This gross distribution is usually fully taxable to the beneficiary/taxpayer unless the deceased owner had made non-deductible contributions to the IRA

You may have to pay income tax on the distribution, based on the type of plan and the manner in which contributions were made by the decedent.  While the form 1099-R has a lot of information, you may need more data to determine taxable portion of the distribution.  For example, if the 1099-R is for an IRA, you need to know the basis - the amount of after-tax contributions to the account.  If no after-taxes contributions were made (or you don't know it and can't find the information) the entire amount is taxable. 

[dandrhuff]

I expect to pay income tax on the distribution. It is fully taxable. The problem is with the Smart Check. Why is it giving me an error? You didn't address that issue. 

[DaveF1006]

It depends. In this instance, go back to revisit your 1099R entry, and put in the full taxable amount that is in Box 1 and report as the taxable amount in Box 2A. This should clear the error. Uncheck the box that says taxable amount not determined if that is the box that is checked on your copy of the 1099R.

@dandrhuff 

[dandrhuff]

I was always taught to enter the information exactly as it appears on my 1099-R forms. By entering an amount into Box 2a and unchecking Box 2b, I am overriding the 1099-R information that was reported to the IRS. The problem appears to only be with the Smart Check and not the program itself. The software is using the amount in Box 1 as the taxable amount which is correct in this case.

According to the Smart Check, Box 2a must have a value. But, according to the "Learn More" Box 2a may be blank. Here's the text:

FORM 1099-R, BOX 2a: TAXABLE AMOUNT

Generally, the amount shown in box 2a is the amount of the distribution that is taxable. However, if the payer is unable to reasonably obtain the data necessary to compute the taxable amount, this box may be blank and the "Taxable amount not determined" box in box 2b will be checked. For pensions and annuities, if the "Taxable amount not determined" box in box 2b is checked, the gross amount of the distribution in box 1 will be used as the taxable amount if box 2a is blank.

[JamesG1]

TurboTax Online can use the simplified method to determine the taxable portion for box 2a of your 1099-R.   Presume that:

• Monthly payments were received,  
• Payments started in 2022, and 
• That box 7 is code 7.

You will need to know:

• The amount of the employee contributions (may be in box 5),
• The date the annuity started,
• The number of months that payments were received in 2022, 
• The age of the recipient when the annuity started,
• The age of other beneficiaries (if there are any), and 
• Was the recipient under the retirement age for the plan.

Follow these steps:

• At the screen Who gave you a 1099-R, select Financial Institution or other provider (1099-R).
• At the screen Any Periodic Payments? select Yes, got regular payments from this retirement account.
• At the screen Payment Start Year select Yes started getting payments in 2022.
• At the screen Let’s figure Out How Much is Taxable, select I need to figure out how much of this money is taxable.
• At the screen Enter Annuity Information enter required information.  Plan Cost may be in box 5.
• At the screen Enter Ages enter required information.

View Federal 1040 tax return line 5a and 5b at Tax Tools / Tools / View Tax Summary / Preview my 1040.

@dandrhuff