1099-R

[FrauBlucher]

I have a 1099-R for an early distribution. I am in New York State. My 1099-R does not even have a Box 16 to report a State Distribution amount. TT inserts the amount in as NY Distribution 2 screens later anyway. Is this just a NY thing? Is it just assumed that the NY Distribution amount is the same as the Fed Dist Amount (Box 2A)? Is a "BLANK" box (or no box at all) the same as a ZERO amount? Is this correct? TIA!

[SteamTrain]

No, it's not just a NY thing...NC does it too....and the software will back-fill box 16 with the State Distribution amount on the "software" form right after you go thru that distribution page, even if your paper 1099-R has no box 16 entry.

When box 2a is empty/blank, the distribution amount usually needs to be  entered as the value of box 1....or the Federally-taxable amount of box 1 if that is less than box 1 , and box 2a is empty.  An empty box 2a is  fairly common on IRA distributions.

NY does have a major issue with having NY withholding in box 14, and some people indicate no NY distribution....i.e. NY says you can't have NY withholding if the distribution didn't exist.

[DMarkM1]

No, transferring the federal distribution amount to the state returns is not just a NY thing.  All the state returns will include the distribution amounts from box 2A as a starting point.  From there exclusions are handled per the state laws and/or answers to the state interview questions. 

Yes, a blank quantity/amount box on a form is a "zero" if left blank in TurboTax.    

[FrauBlucher]

Just to be clear ... My Box 2 and 2a are NOT blank. I do have a Gross Distribution and a (Fed) Taxable Amount. 

My Box 14 (State Withholding) is 0.00 but Box 16 does not even EXIST. 

I understand that the TT program will back-fill Box 16. So my question maybe is more of a software dispute. The backside of my 1099-R states: "Boxes 16-19. These boxes are not included because they are not applicable." So TT should NOT be back-filling a State Distribution amount at all. (I think there is no Box 16 because payroll deductions to a 401k are considered NYS-taxable, i.e., not deferred. State income tax has already been assessed and paid.) TurboTax is assuming a "State Distribution" when there isn't one, at least in NY.

[SteamTrain · Accepted solution]

Well...I don't disagree with you in a strict form-filling sense..

BUT...we are dealing with software calculations here....(and only talking about actual distributions and not rollovers)

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The NY state forms "start" with (close to) the Federal AGI in lines 1-19a of the IT-201, which includes the box 2a amount of a 1099-R  (if a real number) or the Federally-taxable amount of box 1 if box 2a is empty. 

Then, for people in one of the  NYState or City retirement systems, those amounts are subtracted from NY income, down in line 26 of the IT-201......but..... the software uses the NY distribution amount entry to "subtract" that distribution amount, so if you leave the NY distribution as  blank, or zero, then nothing is subtracted from NY income and all of it is included.  That the software ends up putting that in box 16 is immaterial...since it isn't usually used for anything else.

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Then if the 1099-R is not from the NYGovt/City systems, nor a Military 1099-R, which is the case for 94.965% of all 1099-R forms issued to NY residents, a Pension deduction is allowed up-to-$20,000 on line 29 of the IT-201........now, I haven't checked to se what the software uses, but I suspect it also uses the NY distribution amount too...so if the NY distribution amount is left a zero/blank, then there is no deduction.

Why doesn't the tax software just use the 2a value (or Federally taxable amount of box 1 if 2a empty) instead and ignore box 16 altogether....don't know...there are a billion ifs-ands-buts-exceptions where the calculations may not go right if that is used.  (I think I saw a post earlier that some paper Maine Govt pension 1099-R forms have box 16 actually filled in with an entirely separate value for some special ME-calculations.)

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Do some issuers enter a zero in box 2a, when it should be left blank?   yes...that can happen.

The only cases I know of where box 2a can validly be a zero is for direct-transfer/rollovers to another retirement account of the same type (meaning Roth or not Roth)...perhaps occasionally for refunding of over contributions....(and some rare traditional 401k-to-Roth 401k or Roth IRA transfers where only after-tax contributions are allowed.)    BUT...Someone may think of some other situations.

[SteamTrain]

AS far as I can see checking online..... payroll contributions to a 401k in NY  ARE deferred income for NY residents.   ROTH 401k contributions wouldn't be, but that's just normal behavior.

..what state's don't allow a state income deduction for 401k contributions?  PA, NJ....might be a very few others  (ignoring states without an income tax)

[FrauBlucher]

Thanks so much for your reply. I'll just keep swimming, swimming, swimming.... -:)