topic Re: Yes. The Required Minimum Distribution (RMD) rules apply... in Retirement tax questions

Are company pension plans subject to RMD?

wgmurphy81 — Tue, 04 Jun 2019 00:56:56 GMT

Yes. The Required Minimum Distribution (RMD) rules apply...

IreneS — Tue, 04 Jun 2019 00:56:57 GMT

Yes. The Required Minimum Distribution (RMD) rules apply to:

All employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans.
Traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs.
Roth 401(k) accounts.

However, the RMD rules do not apply to Roth IRAs while the owner is alive.

For more information, see the IRS FAQ: Retirement Plan and IRA Required Minimum Distributions FAQs

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

jhalman — Tue, 25 Feb 2020 01:06:07 GMT

What about a defined benefit plan (a traditional pension)? Is all of the payment the RMD or is part of the payment RMD? How can I tell?

Re: Are company pension plans subject to RMD?

JohnB5677 — Tue, 25 Feb 2020 01:16:37 GMT

In the case of a defined benefit plan, the monthly distributions could be considered the RMD.

In reality the defined benefit plan does not have an RMD because there is no pool of money that you as an individual have to deplete. Depending on how you structured your plan before you retired. The benefits end when you pass. You may have put your spouse on it, but then you got a reduced benefit and the benefits end when you both pass. There will be nothing else for the IRS to tax.

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

lnabutovsky — Sat, 29 Feb 2020 04:12:02 GMT

I'm confused. I have pension from the company which pays me monthly the same amount for life. As I understand, RMD depends on the account size and I do not have any account. All money for all participants are coming from the pool which is created with the company money and managing by the company designated financial specialists

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

MaryK4 — Sat, 29 Feb 2020 04:25:28 GMT

Yes, I understand your confusion- my best explanation is- one of the only ways you would not meet your RMD with a defined benefit plan is if for some (unknown) reason you would say "Just don't send me any of my pension."

@lnabutovsky

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

macuser_22 — Sat, 29 Feb 2020 04:42:49 GMT

Virtually all pension plans, defined contribution plans, and annuities in existence today fall under section 401 of the tax code.

Required minimum distributions for defined benefit plans and annuity contracts all require RMD's after age 70 1/2. If you receive periodic (monthly) payments from any pension plan you can be assured that the custodian of the plan is meeting the requirements so you can safely answer "yes" to the question.

The rules that the plan administrator must use to calculate the RMD as required by §401(a)(9) are defined in § 1.401(a)(9)-6) of the Internal Revenue Code (IRC).

The answer to the question does not go on your tax return, it is simply to make sure you do not owe any penalty for not taking the RMD or use it for an ineligible rollover.

The question is just to be sure that the requirement was met.

https://ttlc.intuit.com/replies/3302117

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

lnabutovsky — Sat, 29 Feb 2020 05:37:14 GMT

If I understood you correctly as I receiving my monthly checks I can designate all of them as RMD on my tax return. It does not affect the results of tax return calculations but allows me not to be hit by penalty.

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

macuser_22 — Sat, 29 Feb 2020 05:53:42 GMT

@lnabutovsky wrote:

If I understood you correctly as I receiving my monthly checks I can designate all of them as RMD on my tax return. It does not affect the results of tax return calculations but allows me not to be hit by penalty.

Correct. NOTHING about a RMD goes on your tax return whatsoever. Just say it was all a RMD and move on.

Re: Are company pension plans subject to RMD?

Tricuspid48 — Thu, 19 Mar 2020 21:44:27 GMT

My Dad has been receiving retirement pension wages monthly from Bridgestone for 20 years. He is now 92. How do I know if I need to figure out if he has a RMD and if so how much it is? I don't know how much he has left in his plan. Its not a IRA

I'm using turbotax and it says I need to show what his RMD is I just don't know how to figure it out. Does the RMD apply to him and if so how do I figure it out. My Mom is also in a similar situation with her pension plan.

HELP!!

Re: Are company pension plans subject to RMD?

DoninGA — Thu, 19 Mar 2020 21:46:00 GMT

@Tricuspid48 wrote:

My Dad has been receiving retirement pension wages monthly from Bridgestone for 20 years. He is now 92. How do I know if I need to figure out if he has a RMD and if so how much it is? I don't know how much he has left in his plan. Its not a IRA

I'm using turbotax and it says I need to show what his RMD is I just don't know how to figure it out. Does the RMD apply to him and if so how do I figure it out. My Mom is also in a similar situation with her pension plan.

HELP!!

All Pension payments to someone who is age 70 1/2 or older are an RMD.

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

jimmarywebster — Sat, 21 Mar 2020 18:15:50 GMT

Pensions are treated like IRAs when reporting them. My pension 1099 has a box reporting the total distribution and a box for the taxable amount. Which of these amounts do I use?

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

DoninGA — Sat, 21 Mar 2020 18:26:36 GMT

@jimmarywebster wrote:

Pensions are treated like IRAs when reporting them. My pension 1099 has a box reporting the total distribution and a box for the taxable amount. Which of these amounts do I use?

If you are referring to an RMD then if you are age 70 1/2 or older All of the pension income is an RMD.

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

ColeenD3 — Sat, 21 Mar 2020 18:27:35 GMT

@jimmarywebster

Just enter the 1099-R exactly as it appears. The program will calculate the taxable portion.

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

macuser_22 — Sat, 21 Mar 2020 18:27:57 GMT

@jimmarywebster wrote:

Pensions are treated like IRAs when reporting them. My pension 1099 has a box reporting the total distribution and a box for the taxable amount. Which of these amounts do I use?

Pensions are NOT treated as IRA's at all. ONLY if the IRA/SEP/SIMPLE box in the 1099-R is check will it be treated as an IRA, but a pension can NEVER have that box checked.

Both the box 1 and box 2a amount are used. Enter all 1099-R boxes just as on the form.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

Re: Are company pension plans subject to RMD?

DominicT — Mon, 23 Mar 2020 05:18:06 GMT

If the Defined Benefit plan (company pension) does not have a total year end value why must i enter the part of my annual pension that is RMD when I fill in the Turbo Tax information. There is no way to calculate it. Checking the box saying the entire amount is not 100% RMD is not true but the only way to get past that screen.

Re: Are company pension plans subject to RMD?

macuser_22 — Mon, 23 Mar 2020 14:39:34 GMT

@DominicT wrote:

If the Defined Benefit plan (company pension) does not have a total year end value why must i enter the part of my annual pension that is RMD when I fill in the Turbo Tax information. There is no way to calculate it. Checking the box saying the entire amount is not 100% RMD is not true but the only way to get past that screen.

By law, the amount of the years pension must be the RMD amount, no less and no more.

The rules that the plan administrator must use to calculate the RMD as required by §401(a)(9) are defined in § 1.401(a)(9)-6) of the Internal Revenue Code (IRC).

The question is only to be sure that you did not try to make a prohibited rollover.

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

charlotteharris — Wed, 24 Mar 2021 15:40:19 GMT

How should I respond to the question about whether all or part of my pension fund distribution was RMD?

Re: Yes. The Required Minimum Distribution (RMD) rules apply...

ToddL99 — Wed, 24 Mar 2021 15:56:21 GMT

All of your pension income is a "Required Minimum Distribution".

All retirement accounts, even pensions, must meet the RMD requirements.

However, the way pension plans meet the RMD requirements is by creating an annuity paid periodically (usually monthly).  

Technically, any monthly pension payment is considered a Required Minimum Distribution (RMD) and the entire amount is an RMD. That is how you need to answer the questions. When asked "Was this withdrawal an RMD?", the answer is "Yes", then check "All of this distribution is an RMD."

(Be sure that the IRA /SEP/SIMPLE box is not checked in your data entry).

Re: Are company pension plans subject to RMD?

brianandkarena — Mon, 13 Jan 2025 18:47:59 GMT

My husband has a pension and social security but he doesn’t have a 401k plan. He turned 73 last year and I thought it was only for retirement plans but not pension plans when he receives the same amount each month.