Turbotax Deluxe is telling me I must take an RMD from my Oregon State pension. This is incorrect. It is an employee pension plan, not an IRA. Don't know how to proceed

[shelleymcintyre]

The instructions say I will have to pay extra tax on my pension payout.  It is not a "withdrawal."  I am not taking money out of an IRA or a SEP.  There is no RMD.  Afraid this is messing up my estimated tax due.

[Coleen3 · Accepted solution]

When referring to a retirement account, MRD stands for minimum required distributions, which are mandatory withdrawals you must take from certain retirement accounts after you reach age 70 1/2. If you have reached this age, and you have one of the following accounts, you would need to consult with the account provider to ensure, you are receiving the proper amount to comply.

Basically, MRD requirements apply to any accounts that you contributed to on a pre-tax basis, or that contain tax-deferred investment gains. This includes, but is not limited to:

• 401(k) accounts (except Roth 401(k)s).
• 403(b) accounts.
• Keogh accounts.
• Traditional IRAs.
• SEP-IRA accounts.
• SIMPLE IRA accounts.

A pension is usually a fixed payment over the life of a retiree.  It is the same as, and it satisfies, the "RMD" requirement to withdraw sufficient amounts each year from retirement accounts.

For pension distribution, the RMD is satisfied by simply receiving pension periodically. Under the law it is a required distribution.  Indicate that it is all RMD and his entire RMD with respect to this pension. Therefore, you may simply select "yes" to the RMD question (Was this withdrawal RMD and ALL of this was RMD).  You will also be asked if the amount reported is paid periodically in equal amounts.  By selecting "yes" the RMD requirements are met and you may continue with the tax preparation.