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Level 1

When I enter my regular monthly retirement paycheck from my 1099-R the program asks if all or part is MRD. How do I answer that?

 
2 Replies
Level 1

When I enter my regular monthly retirement paycheck from my 1099-R the program asks if all or part is MRD. How do I answer that?

It depends.

If this is a qualified contributions plan (such as an IRA, 401(k) plans, 403(b) plans, or 457(b) plans), you will need to contact your retirement plan administration to get information about your RMD.

However, you will meet the RMD requirements related to your employer pension plan distributions (see below)

Since the IRS requires the reporting of all RMD payments relates to all qualified plans (and an employer pension plan falls under this category), the system will still ask about RMD (even if it does not apply to your pension distributions).

A qualified plan is a retirement plan sponsored by employers for the exclusive benefit of employees. These plans follow special IRS rules and qualify for special tax treatment, such as deferring paying taxes on the contributions until retirement.

As for the required minimum distribution (RMD), you are required to take your RMD for your IRA and 401(k) accounts. However, if you are asked a question about taking an RMD (because you meet the age requirements) from a pension (only) when entering your 1099-R information, the answer is "yes" that this withdrawal was an RMD and that all the distribution was an RMD (screenshot)

According to the IRS, you must take your first required minimum distribution for the year in which you turn age 70½. However, the first payment can be delayed until April 1 of the year following the year in which you turn 70½. For all subsequent years, including the year in which you were paid the first RMD by April 1, you must take the RMD by December 31 of the year.

The RMD rules apply to all employer sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans. The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs.

Please click this link IRS - Retirement Plan and IRA required minimum distributions for more information.


Level 20

When I enter my regular monthly retirement paycheck from my 1099-R the program asks if all or part is MRD. How do I answer that?

If the monthly payments are from a pension plan, simply indicate that it is all RMD and your entire RMD required of the plan.