If my 1099-r has code 3 on box 7 but "unknow" in 2A Taxable, is amount considered non-taxable?

[aycantu1]

If my 1099-r has code 3 on box 7 but "unknow" in 2A Taxable is amount considered non taxable amount?  I had to retire early from border patrol work and I have paperwork that show I was permanently disable at the time of retirement.  I obtain a part time job?

[Critter]

If the form actually has the word UNKNOWN in the box then leave the box blank in the program and check the box 2b ... the program will then ask follow up questions to determine the taxable portion.   If you know that box 1 is totally taxable then you can simply enter that amount in box 2a. 

[aycantu1]

I leave it blank and it keep populating the total gross.  should I enter 0, to move it forward?

[Critter]

No ... do not override the calculated amount by entering a zero in box 2a ... doing so will get you an IRS letter later.   As I mentioned above ... unless you know of a reason that the distribution should not be fully or partially taxed it is fully taxable.  99% of the time it is fully taxable even if box 2a is blank or they write in unknown. 

Box 2b should be checked and the program will walk you thru the following screens to determine if any of the amount is not taxable. 

[aycantu1]

Thank you

[macuser_22]

A code "3" will ask the earliest age that you could have retired at if no disabled and were still working.  If younger than that age then the distribution will be include on the 1040 line 1 as wages since it is a wage replacement. After that retirement age it will go on line 4c & 4d as  pension income.

That is probably a CSA 1099-R from OPM.

OPM violates the 1099-R rules by writing "helpful" information in the box rather than just the value or code like they are supposed to. OPM has done that for years and it causes more confusion than help. They put UNKNOWN in box 2a when it should be blank, and put "7 NONDISABILITY" in box 7 when is should only be "7", "1" or "2".

The taxable amount in box 2a is usually the box 1 amount unless you have after-tax contributions in the retirement plan and use the simplified method. If this is NOT the first year of receiving payments, then you should use the same method that was used last year - either the box 1 amount of the simplified method, using the carry forward simplified information from last year.

If box 2a is blank or UNKNOWN then there should be amount in box 9b to use with the simplified method. If no amount in 9b then contact OPM to find the account "basis".

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.

Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

[eapconsulting]

1099R from OPM. Box 2a says unknown. Box 1 is $73847 and box 9b is $8230. Do I enter the difference in box 2a as the taxable portion?

[DianeW777]

It depends.  If you have recovered your full after tax contributions then the answer is yes. If not, you will need to use prior year tax returns to determine your taxable amount.

• Use these links for more information about determining your taxable amount:  Federal Retirement FAQs and IRS Publication 721 (see page 8 for an example and worksheets needed).