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".
@Purtellr wrote:
7-D means it’s money from a annuity that is qualified account
Just did a test 1099-R with a code of 7D in box 7 using the online editions. Selected Non-Qualified Plan. The program completed the 1099-R section with no errors.
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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.
Thanks!
This applies even if mine is a fixed monthly distribution and not an RMD?
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.
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
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.
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?
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
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.
Sorry to hear that. Guess I'll have to wait as well seeing I'm using the online version.
7-D means it’s money from a annuity that is qualified account
Per the standard 1099-R form, Box 7: code 7 and code D.
Box 7. The following codes identify the distribution you received:
Code 7 = Normal distribution
Code D =Annuity payments from nonqualified annuities that may be subject to tax under section 1411. (1411 NIT-Net Investment Income tax for income over 250K there is a 3.8% additional tax imposed.)
**You can see the box codes for the 1099-R's on the IRS website if you don't have them listed on the back side of your 1099-R's. go to " https://www.irs.gov/pub/irs-pdf/f1099r.pdf " Hope that helps.
The Code "D" is what is causing the TurboTax software issues I was having. Hopefully it will be fixed by Monday.
@Purtellr wrote:
7-D means it’s money from a annuity that is qualified account
Just did a test 1099-R with a code of 7D in box 7 using the online editions. Selected Non-Qualified Plan. The program completed the 1099-R section with no errors.
Yeah!! Looks like this actually worked. I did have to delete and re-enter the 1099-R's and I kept the rounding to even dollars just in case that is still an issue. Thanks for the update!
It finally works online after deleting and re-entering the 1099-R's but I won't actually be filing until next week. Let's hope the fix stands. Good Luck.
You’re saying it passed the program review. But don’t know if IRS will accept it yet
When I import the file for the Annuity, box 7 has 7D entered, which shows up as Annuity payments from nonqualified annuities. There is no option for defining it as a qualified account plan.
When doing the MN State program, it is hung up on having me Select the type of pension.
None of the above (9 choices) doesn't work.
TurboTax needs more information about it.