Reporting W2 Earnings Non-qualified Pension Plan

Forum|Forum|3 years ago
February 6, 2023
16 replies
146 views

TurboTax 2022 is reporting my W2 non-qualified pension distribution as Other Income, line 8, on my 1040 instead of, line 1, Wages as in all previous years. The amount is the same in all years & all the reporting information is the same. Each year I have answered the Turbo Tax questions the same?

Best answer by rjs

Expert Reviewed

@BME

Compare the Social Security Benefits Worksheet from the original tax return to the Social Security Benefits Worksheet in the amended return to see where the difference is. I think you will find that eliminating the IRA deduction on Schedule 1 line 20 reduced the amount on line 6 of the Social Security Benefits Worksheet.

In any case, you should not override an amount that TurboTax calculated.

rjs

Level 15

The IRS changed the forms for 2022. TurboTax is reporting it correctly. The amount on Form 1040 line 8 comes from Schedule 1 line 8t, which is where the nonqualified pension distribution is now reported.

COWBOYS FANAuthor

Level 2

Thank you for the quick reply.

dncasciari

Level 2

I used TT and had the same question. TT is not cheap, you would think they would highlight up front and changes year-over-year that ongoing users would need to know instead of having to search for why reporting has changed. I had to find it myself. Come on TT... !!

dmertz

Level 15

It pays to read the IRS instruction for the forms you will be filing, particularly Form 1040, even if you are using TurboTax to prepare your tax return. The What's New section of the Instructions for Form 2022 Form 1040 addresses this change, among many others. In general, having TurboTax mention all of the many changes from year to year would likely cause more confusion rather than less due to TurboTax's history of poor wording of text in many areas.

BME

Level 4

I am in the process of amending our 2022 return, to report corrections for an excessive traditional IRA contribution that we made for 2022 based upon a W-2 "Box 1 and Box 11" distribution from a nonqualified plan. We have no other W-2 income. The Ttax software now has the distribution amount properly reported on Sch. 1, Additional Income, Part I, ln (t), rather than on Form 1040, ln 1a. It properly eliminates the IRA deduction that was taken. And, the Form 5436 for the 6% excessive contribution penalty is prepared, and is correct.

The question I have is this: This change triggers an increase in the calculated taxable Social Security benefits amount -- I see the worksheet for this calculation. I guess this is correct, and I should just keep it all as calculated in our amended return? Any confirmation or insight would be appreciated, i.e., I doubt that I should override the changes in the taxable Social Security benefits amounts. Make sense? Thank you

rjs

Answer

Level 15

Expert Reviewed

@BME

In any case, you should not override an amount that TurboTax calculated.

BME

Level 4

Yes, I see, in comparing the taxable Soc Sec calc worksheets (original to amended), the effect of the IRA contribution & deduction changes. Will keep as recalculated. Feel better. Makes sense & thank you.

gapataky

Level 2

I have the same issue and was also was wondering if I should file and amended return.