Tax Free Pension

[MichaelJMaggio]

My wife and I both have Tax Free disability pensions from public service jobs. It is saying we owe, where we shouldn't owe any taxes.

[ToddL99]

How are these pension payments reported to you? Form 1099-R or something else?  If a 1099-R, what is showing in Boxes 1, 2a and 2b?

[MichaelJMaggio]

It’s a 1099R 

box 1 has income 

box 2B Taxable amount not determined marked

box 7 is marked 3

Thank you in advance.

[ToddL99]

And, without proving any personally identifiable information (e.g. name or SSN), why do you consider it non-taxable? Retirement benefits paid early because of a disability are not generally tax-free - they are treated a bit differently, but are still taxable.

Who was your employer? Who is making the payments? How long have you been receiving them?

[MichaelJMaggio]

My wife and I were police and Fire, we receive monthly pension checks.

[ToddL99]

As pension payments these are considered "retirement benefits" and are taxable. Retirement benefits paid early because of a disability are not generally tax-free - they are treated a bit differently, but are still taxable (for purposes of federal tax). 

If you retired due to a disability, the pension you receive through a company-paid plan counts as wage income until you reach the minimum retirement age (the age at which you can receive a pension if not disabled). Once you reach that minimum retirement age, the pension is no longer reported as wage income but as pension income. This is actually a benefit, since it will count as "Earned Income" for purposes of tax credits.

Disability benefits (e.g. short-term, long-term disability insurance benefits) may be non-taxable, depending on the circumstances. VA Disability benefits are non-taxable, and are not reported to you on a Form 1099-R

The following post provides additional information on the subject Is disability income taxable?