topic Pension payment conversion to simple IRA in Retirement tax questions

Pension payment conversion to simple IRA

208511 — Fri, 09 Apr 2021 02:02:00 GMT

Hi,

Can i convert part of my annual pension (1099-R) to a simple IRA.. this is addition to existing regular W2 income that does not qulify for IRA due to income threshold and existing 401K. If possible, can i do this several 90 days after my last installment?

thanks in advance,

Re: Pension payment conversion to simple IRA

VolvoGirl — Fri, 09 Apr 2021 02:11:35 GMT

No. You cant convert pension payments to a IRA. Or ask the plan if you can convert some of your account. But a conversion will not be the same as a new IRA contribution. So you wouldn't get a Deduction for it.

Re: Pension payment conversion to simple IRA

208511 — Fri, 09 Apr 2021 02:18:21 GMT

thanks for the reply. Its strange that TurboTax is actually allowing me to enter this as a rollover in partial rollover section and adjusting the taxable amount. By the way, i did forget to mention that i actually had taxes taken out of this pension installments.

Re: Pension payment conversion to simple IRA

VolvoGirl — Fri, 09 Apr 2021 02:19:47 GMT

@dmertz thoughts, comments?

Re: Pension payment conversion to simple IRA

dmertz — Fri, 09 Apr 2021 03:13:56 GMT

Nothing on the Form 1099-R indicates the type of qualified retirement plan from which the payments are received, so just based on the information on the Form 1099-R TurboTax cannot preclude you from reporting the distribution as having been rolled over.

Distributions received as a series of substantially equal periodic payments for life or for a period of 10 years or more are not eligible for rollover. They are essentially RMDs.

Re: Pension payment conversion to simple IRA

208511 — Fri, 09 Apr 2021 03:33:17 GMT

thanks for the reply Dmertz.

So does this mean that distributions from Pensions are treated like distribution from an RMD IRA? even though i'm not of RMD age?

in addition, does this mean in the future, that if i have these distributions converted immediately into a IRA that these would still NOT be eligible for rollover?

thanks again for you clarification and assistance.

Re: Pension payment conversion to simple IRA

dmertz — Fri, 09 Apr 2021 12:00:12 GMT

Once the pension begins making periodic pension distribution, the plan must continue making the periodic pension distributions and they are not eligible for rollover (no matter how a rollover might be done). The requirement that the distributions be made and their unconditional ineligibility for rollover are the same as would be for an RMD from an IRA. (Note, however, that the allowance by the IRS to repay a 2020 RMD and report it as a rollover did not extend to periodic pension payments.)