Why is taxable amount “unknown” on 1099R?

[DaveF1006 · Accepted solution]

When the Taxable Amount is marked as 'Unknown'; this means that Office of Personnel Management did not calculate the tax-free portion of your annuity. Some of the most common reasons for not calculating the tax-free portion of your annuity are; 

• Your case is a Disability Retirement
• You retired prior to November 19, 1996
• You have Voluntary Contributions
• Apportionment was paid to your former spouse(s)
• Your case has not been finalized and you are in Interim pay status
• You have Survivor benefits payable and/or
• Your case is an Office of Workers Compensation case

Whatever the case, Turbo Tax will correctly determine the taxable portion of your annuity distribution based from the answers you give them regarding your annuity.

[brees]

Turbo tax does NOT help you calculate the unknown taxable amount for a 1099

[ErnieS0]

@brees. Do you have an OPM pension? If you did, TurboTax will help calculate the taxable amount if you use the Simplified Method. 

You'll see a screen Any Periodic Payments? Say YES and answer the questions. If you use the Simplified Method, you'll need to know the start date, plan cost, number of payments received in 2020 and the tax-free amount previously recovered.

If you use the General Rule, you will have to calculate the taxable amount yourself.

For help see Publication 721 (2020), Tax Guide to U.S. Civil Service Retirement Benefits

[chrissy921]

One other tip for anyone with "unknown" in taxable amount on an OPM 1099R.... After I manually calculated my taxable amount, I found that in turbo tax by checking the "I'll figure my taxable amount".....the questions are asked and taxable amount calculated.  Fortunately, my manual calculations matched.  

[sudiki]

Turbo Tax DOES NOT compute the taxable amount!  It hasn't in the past 3 years either!

[mhoshovsky]

The solution is not readily apparent, but here's what worked for me using Turbotax 2024

When working in the step-by-step view for Retirement plans, select the OPM 1099-R entry under your list of 1099-R entries. The series of screens will ask to confirm payer info, enter annuity info, ask about you being a public safety officer (no), box 5, if it's a 403(b) plan (no), about RMDs, what you did with the money, and if you got regular payments (yes), and if those started this year (no).

The key question is next - was the taxable annuity amount used as the taxable amount. Well, since the OPM form says "UNKNOWN", one could assume it was the same amount. But chose "No, a different amount was taxable".  That allows you to go on to screens allowing you to use either the IRS simplified method or general rule (I chose simplified), followed by other questions that allow Turbotax to do the calculation.