Distribution From a Qualified Retirement Plan-Exce...
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Level 1

Distribution From a Qualified Retirement Plan-Exception

If I am exempted from paying tax on early distribution from a qualified retirement plan. how do I enter that in Turbo Tax?

3 Replies
Expert Alumni

Distribution From a Qualified Retirement Plan-Exception

On your 1099-R form, the amount that is taxable is listed in box 2. If that amount is wrong, you may need to get your 1099-R form corrected by the company that sent it to you. 

 

The code in box 7, indicates your tax status for this distribution. For an early distribution, you will get  1 or 2. Code 2 means, that a penalty exception applies. 

 

After you enter the 1099-R information in Turbo Tax, you will see a screen telling you that you are paying extra tax on this distribution. After that, they run some of the exceptions to the early withdrawal penalty. Be patient because there are a lot of questions.

 

Eventually, you will get back to a screen called Your 1099-R entries. Click Continue again and you be asked about all of the remaining exceptions to the penalty. 
 

 

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Level 1

Distribution From a Qualified Retirement Plan-Exception

Thanks for your reply.  Do I need to file the complete tax return, or just the form to amend the return?

 

Employee Tax Expert

Distribution From a Qualified Retirement Plan-Exception

If your return has already been filed and accepted (or still shows pending) you will need to amend your tax return.

 

Here is a TurboTax Article on Amending your tax return.  If this is necessary you will only change that area of the return that pertains to your 1099R entry: Amending my Tax Return

 

If you have not filed yet, you can just go back through the screens as outlined in JulieS answer below:  

 

On your 1099-R form, the amount that is taxable is listed in box 2. If that amount is wrong, you may need to get your 1099-R form corrected by the company that sent it to you. 

 

The code in box 7, indicates your tax status for this distribution. For an early distribution, you will get  1 or 2. Code 2 means, that a penalty exception applies. 

 

After you enter the 1099-R information in Turbo Tax, you will see a screen telling you that you are paying extra tax on this distribution. After that, they run some of the exceptions to the early withdrawal penalty. Be patient because there are a lot of questions.

 

Eventually, you will get back to a screen called Your 1099-R entries. Click Continue again and you be asked about all of the remaining exceptions to the penalty. 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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