Retirement Income. Three Year/General method or Do Not Apply

Forum|Forum|6 months ago
February 10, 2026
3 replies
78 views

I have two retirement related sources of income to report, but I am not sure I am entering them properly. One is a lump sum distribution received as an inheritance from a recently passed relative's 403b plan. The other is a lump sum from my own 401k. What are the proper classifications of these distributions? Should they be marked as Three Year, General Method or classified as None of the Above?

ReneV4

Level 6

It sounds like you've reached a section with questions pertaining to older versions of pensions. You should likely select "None of the above".

Your two retirement related sources of income are reported separately, with each having its own Form 1099-R.

As you review or revise the entries to your Form 1099-Rs, select "No" when asked about periodic payments, which often triggers the additional questions about taxable amount method.

Also, pay close attention to the Box 7 Code used in each of the Form 1099-Rs.

A distribution from an inherited retirement plan will typically have Code 4 (which tells the IRS this is an inheritance and you will not owe an early withdrawal penalty, regardless of your age).

A distribution from your 401k plan, on the other hand, will typically have a Code 7 (if you are at retirement age), or Code 1 (if you are under age 59 1/2).

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knuckles1742Author

Level 2

Thanks!

Does choosing "None of the above". also pertain to the lump sum distribution I took from my 401k? Your response is not clear on that. I want to get it right since the choice impacts my state tax obligation.