Annoying Lack of Clarity on line 5b Form 1040

[rayking4]

We have a taxable (non-qualified) annuity that paid us $516.00 with a taxable amount on the interest earned of $24.06.   Turbotax is showing on the page:  RETIREMENT INCOME RESULTS

Pension and annuity distributions: $20,024

When I click on the $20,024 on line 5b on form 1040, it refers me to the Form 1099-R with the $24.00 taxable amount which obviously makes no sense at all.

After some digging, I noticed the extra $20,000 was related to Form 8915-F, Qualified Disaster Retirement Plan Distributions which comes from the pandemic in 2020!

There was no indication anywhere in the step-by-step or in the magnifier view of line 5b.  It only refered me to the Form 1099-R with the $24 taxable amount.

Beware of this if you see money on line 5B that you long forgot about.

Thank you.

[DawnC · Accepted solution]

Can you delete the 1099-R form?   Then see if there is anything on Line 5b before reentering it.   Did you take any distributions in 2020, or did you answer YES to those questions?   When you are in Forms Mode, click on Delete Form on that 1099-R and are there any other 1099-R forms in your Forms List on the left?  

[rayking4]

Hi. I did delete the form, and nothing changed.  You are on target with the 2020 distributions.  What is strange is i never checked anything about taking them in 2020 and can't recall anything about this and have to go back to 2020.  I was over 59 1/2, so I am not sure why I would be trying to avoid the 10% penalty for early withdrawal?

Thank you!

[DawnC]

It wasn't a penalty issue in 2020.   During 2020, taxpayers were allowed to take a retirement distribution (up to 100K) penalty-free.   However, the ordinary income tax still had to be paid but could be spread over 3 years (2020-2022).   If you took a distribution in 2020, elected to spread the tax, and you used TurboTax, the software will automatically create Form 8915-F with 1/3 of the distribution amount reported on your tax return.   Look for Form 8915-F - it would have been listed as a covid or coronavirus distribution.    Then check on your 2020 and 2021 returns.  You should see 1/3 reported on each return if you took a qualified distribution in 2020.