Why in my return showing my retirement distribution non-taxable

[ae_servati]

I use TT Deluxe. Been using TT for years. Until now (TY2025), when entering my CSA 1099R info in TT (TurboTax) I have always left box 2a blank since it is marked UNKNOWN, based on feedback from TT. Now, doing my taxes, the Gross distribution displays non-taxable, when in previous years, it would show the taxable amount. TT should be using the simplified calculation since I do enter the amount in box 9b and box 5.  I was 85 in TY2025. would this make my gross distribution fully non taxable?  I am asking since Iget the additional $6000 being over 65 on top of my standard deduction (single) and my refund is HUGE - $5700. i did review past years TT returns and I always had taxable income. If I manually type the gross ditribution in box 2a, my refund drops to $500. Is there an issue with TT deluxe 2025? 

[SteamTrain]

@ae_servati 

Yeah, box 2a should be left blank.

On one of the pages AFTER you enter all your CSA-1099-R tax form data, there is one screen  that asks if in prior years was the total amount taxable...you need to answer NO, ant then the General and Simplified methods will be presented as choices  in the next screen...for you to then enter the appropriate information to calculate what the proper taxable amount really is.

Make sure you did NOT select the SEP/SIMPLE/IRA box on the main form.

[ae_servati]

ok, now I am confused so please be patient with me. I have always answered YES in previous years since I did pay tax than it would adjust the taxable amount. If I follow the instructions you gave, it asks for annuity start date (which date do i use? 1/1 25 for tax year or when I stated my retirement?), plan cost which I assume is box 9b. Then it asks tax free amount previously recovered.  I never had to do this before and now my refund is lower again 😒 

[SteamTrain]

@ae_servati 

Sorry, but I don't know how the Simplified method proceeds.

Never done it myself.  You seemed to say you use the Simplified method in prior years, so I thought you knew.

Yest, the month & year you started getting that CSA-1099-R is the start date.....I think...

@dmertz  is FAAAR mor knowledgeable about this process than myself.  He may comment if/when he sees this later.

[dmertz]

If you have after-tax basis in the plan, the Simplified Method must be used to determine the taxable amount when the payer indicates that the taxable amount is unknown.  If you have no after-tax basis in the plan, which I don't think is the case, the entire amount is taxable.

When you've used the Simplified Method with TurboTax in past years, when you transfer in your previous year's tax return to begin your current year's tax return, TurboTax normally carries your previously provided  Simplified-Method information forward so that you don't have to enter it again.  I don't know why that would not have happened in this case.  If necessary, review the TurboTax's 1099-R worksheet for your CSA-1099-R to find the details.

[ae_servati]

Thanks for the advice. I have not look at this since Saturday due to my frustration. I will follow your instructions this weekend and if that does not work then I am going to start the whole return from scratch without data transfer since I have seen a boat load of complaints on other bulletin boards/blogs complaining about this same issue.

[ae_servati]

no , it did not resolve.  

[JamesG1 · Accepted solution]

I hope that this is helpful to you.

TurboTax Online will use the simplified method to determine the taxable portion for box 2a of your CSA 1099-R.   Presume that: 

• Monthly payments were received, and
• That box 7 is code 7.

You will need to know: 

• The amount of the employee contributions (should be in box 9b),
• The date the annuity started,
• The number of months that payments were received in 2025, 
• Tax-free amount previously recovered, if any,
• The age of the recipient when the annuity started,
• The age of other beneficiaries (if there are any), and 
• Was the recipient under the retirement age for the plan.

Follow these steps: 

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Click on the down arrow to the right of Retirement Plans and Social Security.
• Click to the right of IRA 401(k) Pension Plan Withdrawal (1099-R).
• At the screen Who gave you a 1099-R, select  Office of Personnel Management (CSA 1099-R).
• At the screen Annuity information, select Yes for the question Did you get periodic payments from this retirement account on a regular basis?
• At the screen Annuity information, select No for the question Did you start getting payments in 2025.
• At the screen Annuity information, select No for the question For the years you received these distributions, was the total amount shown in the form the amount you paid tax on?
• At the screen Annuity information, enter the annuity start date, plan cost, months payments were received and amount recovered in previous years.  (This will be $0 if this is the first year that you receive the payment.)
• At the screen Annuity Information, Plan Cost should be in box 9b.
• At the screen Annuity Information, enter the beneficiary ages.
• The taxable amount will be computed by the simplified method.

View Federal 1040 tax return line 5a and 5b at Tax Tools / Tools / View Tax Summary / Preview my 1040.

@ae_servati