topic I have a payable on death annuity distribution 1099R with box 2a blank and box 2b checked. I know the cost basis and the taxable amount. Payor unhelpful with offering a corrected 1099R. Do I just uncheck 2b and enter the taxable amount? in Retirement tax questions

I have a payable on death annuity distribution 1099R with box 2a blank and box 2b checked. I know the cost basis and the taxable amount. Payor unhelpful with offering a corrected 1099R. Do I just uncheck 2b and enter the taxable amount?

nzjn58 — Thu, 19 Feb 2026 06:30:04 GMT

Re: I have a payable on death annuity distribution 1099R with box 2a blank and box 2b checked. I ...

ReneV4 — Sat, 21 Feb 2026 23:11:45 GMT

No. You should not alter the original Form 1099-R. Doing so will cause your return to be flagged by the IRS for not matching what they received.

Instead, you can use the prompts within TurboTax to reconcile your basis.

First, ensure the distribution code in Box 7 is correct (Code 4 for death, or 7 for a direct distribution).

Upon inputting the information from your Form 1099-R, TurboTax will ask questions to determine if it was inherited annuity.

You will also be asked if the amount in Box 2a is correct, to which you will select "No", which will then ask you to enter the known cost basis.

TurboTax will then calculate the taxable portion for you and place the total distribution on Form 1040, Line 5a, and the taxable amount on Line 5b.

Re: I have a payable on death annuity distribution 1099R with box 2a blank and box 2b checked. I ...

nzjn58 — Sun, 22 Feb 2026 06:04:15 GMT

I don't find either TurboTax premier or TurboTax premium operating as you describe. Code 4 is in box 7 as required. IRA/SEP/SIMPLE box is not checked This is an inherited non-qualified fix period annuity of 5 years. After entering 1099-R information I select "I need to file a substitute 1099-R" on the next page. I select that the original annuitant/retirement plan owner was born prior to 1952. I never get prompted with anything about whether this annuity is inherited or not, whether or not the amount in box 2a is correct or not, etc. And then on the next page I am asked if this was a distribution from a (1) 403B or (2) other type of qualified plan!!! which makes no sense given the distribution is from a non-qualified plan. To continue I have to answer about RMDs, which are further irrelevant in this case. I get past the form 4852 questions. Anyway after further questions and entering some numbers which don't seem to be relevant to a non-qualified plan, I reach a page that tells me my taxable amount has been calculated according to the simplified method which per IRS rules is not to be used for non-qualified plans. After going through this process several times I have come to the point where the only valid place to make this work is to modify the 1099-R via the form 4852 (found this under view/forms menu item) for the correct taxable amount, but then this modifies the original information into the original 1099-R form that needs to be corrected (which I am told I should not do). Is the software broken, of have I missed a simple step somewhere?

Re: I have a payable on death annuity distribution 1099R with box 2a blank and box 2b checked. I ...

fanfare — Sun, 22 Feb 2026 07:25:53 GMT

just uncheck 2b and enter the taxable amount

You should also change the Box 7 code to "7"

@nzjn58

Re: I have a payable on death annuity distribution 1099R with box 2a blank and box 2b checked. I ...

nzjn58 — Mon, 23 Feb 2026 05:11:45 GMT

Turns out that if box 7 entry is “7”, the software asks whether the plan is qualified or non-qualified. It doesn’t query qualified versus non-qualified if the entry is “4” which is the only box 7 value on my payor 1099-R. If “4” is entered first and I add “7” as a second box 7 value, the software behaves as if only a “4” is entered.
Inserting a box 7 “7” value will lead to a qualified versus non-qualified question, but it doesn’t matter because after form 4852 text is entered, there is nothing that prompts a user to enter numbers to correct the 1099-R, in particular to enter the cost basis so that the software can insert a correct value into box 2a on a form 4852 that replaces the incorrect 1099-R.
After running through several options countless times, my approach is to enter values “7” and “4” (in that order) when initially entering 1099-R box 7 details, continue through the process and select “I need to file a substitute 1099-R” on a subsequent query page. Use next pages to answer questions on how one calculated substitute values, and did the payee (turbotax user) attempt to get a corrected 1099-R from the payor, etc. At this point the software doesn’t do anything to prompt a user to enter corrected 1099-R values. The user needs to open the form 4852 (substitute 1099-R) that the software generated. Find and modify the form 4852 in the view/forms menu item. This is how I make 2025 premier work in my case as of this date. I expect it is better to generate a form 4852 (so that this form is included in e-filing or filing by mail) instead of just changing 1099-R details at initial entry. Once form 4852 is opened and revised, the software will change initial 1099-R entries to match what is revised via the 4852 form and the software follows through with valid calculations.