topic IRA started from a pension loan in Retirement tax questions

IRA started from a pension loan

papa281 — Tue, 04 Feb 2020 01:51:28 GMT

Upon retirement from the NYPD I took a pension loan and rolled it over into an IRA. When I start to take money from this IRA and enter it into Turbo Tax section do I select the option “IRA rolled over from a government pension”

Re: IRA started from a pension loan

DaveF1006 — Tue, 04 Feb 2020 02:18:41 GMT

I ran this in my Turbo Tax test account and that option never appeared in the Federal interview or in the state return. Where did this appear for you?

Re: IRA started from a pension loan

dmertz — Tue, 04 Feb 2020 05:02:13 GMT

If you received a loan from your pension plan that you must pay back and not a distribution reported on a Form 1099-R from the pension plan, this sounds like you simply used the money to make a regular contribution to an IRA and it is not a rollover of any kind.

Re: IRA started from a pension loan

papa281 — Tue, 04 Feb 2020 11:21:43 GMT

When you retire from the NYPD you can take the money from your pension that was not taxed in a lump sum and put it in an IRA, which I did. My question is when you start to withdraw the money RMD at age 70 1/2 when you enter it in the turbo tax program it asks if that money was earned as a public safety officer. So that question would be marked as Yes. After you continue a list comes up and one of the options to pick is “IRA rolled over from a government pension”.
That is what I am looking at. Would you choose option.

Re: IRA started from a pension loan

dmertz — Tue, 04 Feb 2020 13:48:11 GMT

Yes, it appears that you established this IRA by a rollover from a government pension (for which you would have received a Form 1099-R for the year of the rollover) and that you did not receive any loan. A distribution from the IRA would be reported on a different Form 1099-R.

Re: IRA started from a pension loan

papa281 — Tue, 04 Feb 2020 19:28:47 GMT

After you enter the info from the 1099R the next page asks if this money was earned as a public safety officer, which I did so if would check this box. The next page gives a list of different options to choose from such as, federal pension, teachers pension, government and local pensions, etc and the one option before the last is “IRA rolled over from a government pension”

does my situation count as this?

Re: IRA started from a pension loan

KarenJ2 — Sun, 09 Feb 2020 17:52:08 GMT

You should choose "IRA rolled over from a government pension."