DC Firefighter pension tax credit for taxes paid on contributions already taxed

[nancydip1]

Hi -

My husband is a retired DC Firefighter. On the DCRB website, they posted that "employee contributions made to the DC Firefighter’s Retirement Plan (the Plan) by firefighters prior to July 18, 1999, were on a post-tax basis. Because these contributions were made after tax, these firefighters qualify to receive tax exclusion on the annuity payment they receive from the Plan as calculated under the IRS Simplified Method. This tax exclusion recognizes that these firefighters previously paid taxes on their contributions and avoids their being taxed twice. Where in Turbo Tax do I figure out how to receive this tax exclusion? And what forms do I use?

[BillM223]

First, the pension should be reported to you on a form 1099-R. I assume that you have already received it.

Then, do a Search (upper right) for 1099-r and click on the Jump-to link (Mac users must look for 1099-r in the Topics List). Just type 1099-r and hit Enter - ignore all the suggested search terms.

You will be asked if you want to import the 1099-R (it depends on who issued it). In the worst case, you can type it in yourself.

Be sure to indicate that the 1099-R belongs to your husband. Then start to enter the fields. Enter the data just as it is recorded on the 1099-R.

Eventually, you will be asked what kind of retirement plan this is: qualified or non-qualified. Judging by what you have said, you will click on "qualified plan".

Keep going through the interview, answering as best as you can. Eventually, TurboTax will ask you "Any Periodic Payments?" I imagine that answer is "yes".

Then comes the question of when did the pension payments start?

Then, was the amount in Box 2a used as the taxable amount last year? Yes/No.

Eventually, you will be asked if you want to use the Simplified Method or the General Rule. To do this, you will need to know a number of things, such as when the pension started, whether or not you have the right of survivorship, how much after-tax contributions your husband had already put in and how much after-tax contributions have already been returned to you.

I imagine the people at the pension fund will be able to help you answer these questions.

Then TurboTax will apply the Simplified Method to calculate how much of each monthly payment was the return of this after-tax contribution and therefore not taxable for this year.

Anything else?