1099-R software issues errors & no Non-qualified distribution option 1099-R's

[carolbogdan2]

Seems that one problem is fixed and another one pops up.  Sorry for the long discussion. 

The 1099-R questions have now added the "Was This Distribution From a 403(b) Plan?" but there is no option for "Non-Qualified" distributions so I am back in a circle.  Anyone else have this situation?? 

If I choose "NO" It now tells me I owe in penalties.   These are not 403(b) plans, but "Non-Qualified" taxable annuities that report on 1099-R box 7 code "D".

Was This Distribution From a 403(b) Plan? 

Yes, this is a 403(b) plan

No, it's another type of qualified retirement plan

     In the past I used the amount as RMD and 100% of the distribution is RMD.  This no longer works.  If I put $0 for RMD, It gives me an error saying "type" should not be selected, but if I uncheck it...goes back in the loop "needs review" and back to the "Was This Distribution From a 403(b) Plan?"  I was told this would be fixed last week, but it still has not.  

I still had to round out the pennies to get the other 1099-R "RMD" error messages out for my other IRA distributions Online as of today 3-13-23, but that works now. 

     Turbo Tax support made me add the "Expert" option and I cannot "downgrade" now without deleting the entire return and re-entering, which I've already done multiple times per their request to "fix" other software issues.  If I have to re-enter, I might as well try another tax service!  So frustrated with lack of knowledgeable TT support staff.

[DanaB27]

Please sign up to receive updates here: Why am I getting an error when entering Form 1099-R box 7 code 7D?

[DB775]

I am having same issue. Stuck in loop. So frustrating!!

[MarilynG1]

The IRS considers any income reported on Form 1099-R as 'Retirement Income'.

Go ahead and choose 'Other Qualified Plan'. It's all taxed the same. 

As far as RMD goes, you can indicate that 'the entire amount was RMD' and be done with it. 

Here's more info on Tax Form 1099-R.

@DB775 

[DB775]

Thanks!

This applies even if mine is a fixed monthly distribution and not an RMD?

[carolbogdan2]

MarilynG1 -

That is what I originally did.   As of 3-15-25 this still does not work.

Apologies, I didn't realize my answer check box didn't show up on your end.  I've already done a screen share with 2 different people at TurboTax on 3-7 and they acknowledged there was a software issue being worked on and should be fixed by 3-10-25.  It apparently is still not fixed.

[Purtellr]

I have the same issue.....spent an hour on the phone with a support person working from home. He sent me a link for the IRS, thinking it was an IRS problem.   7D is for a Qualified retirement withdrawal...but Turbo Tax won't accept it... Please tell me when it's fixed

[DanaB27]

If you are using TurboTax Desktop the issue with code 4D and 7D has been fixed. Please make sure you updated the software. You might have to delete and reenter Form 1099-R.

For TurboTax Online the fix is expected by the end of the week.

@Purtellr 

@carolbogdan2 

@DB775 

[Purtellr]

I removed both of my 1099=R   and entered them again; they won't pass the review.  Only one has a minimal amount in box 2a ($103.76). The program thinks they are duplicates. They are NOT duplicates,   they both are from a Qualified plan per Met Life; that is;; why I have 7D in box 7

there was no Non-qualified option to choose, so I chose from another qualified plan..what am I supposed to do on the page?

[DanaB27]

Are you using TurboTax Desktop or TurboTax Online?

@Purtellr 

[Purtellr]

Hello, I'm using an online version of Turbot Tax that I get via USAA that gives me 20% off.....where this version is hosted I have no idea

[karen4984]

I apologise for the frustration this software behavior has caused.  This is a known issue, and there is a workaround.

In the 1099-R entry, if forced to choose between 403b and another qualified plan, go ahead and pick "another type of qualified plan" (even though it is not).  If forced to enter RMD information, put some number.

Once the 1099-R has been entered, go to "complete check/review."  Press the blue button next to something like "answers to review."  Do NOT press the blue button that specifically mentions the 1099-R distribution.

In the review screens, delete any numbers in the RMD text boxes, and choose "No entry" radio button for type of account.  Untick the "Yes RMD" box if offered.  These steps should clear your error.  Be sure to review your 1099-Rs, 1040, and 5329 (if applicable) carefully before filing to ensure everything is being reported as intended.

The review may or may not still show some alert related to the distribution; however it should not prevent filing.

[Purtellr]

Turbo Tax online via USAA offer

[Purtellr]

Still not accepted by IRS.    Waiting till Monday 3/24

[carolbogdan2]

Sorry to hear that.  Guess I'll have to wait as well seeing I'm using the online version.