disability nontaxable 1099R

[TD27]

I can't seem to figure when inputting income and one is PERS nontaxable 1099R, distribution 3 and I think Turbo Tax is putting it in a taxable category, I need to figure out if the software is including it as taxable income or not?  All prior years income was nontaxable.  

[JohnW152]

A distribution code of 3 on your Form 1099-R represents disability income.  This distributions isn't subject to an additional 10% tax as an early distribution, but it is still included in your taxable income.

According to Disability Pensions in the IRS's Publication 575,

If you retired on disability, you must generally include in income any disability pension you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on Form 1040 or 1040-SR, line 1; or Form 1040- R, line 8, until you reach minimum retirement age. Minimum retirement age is generally the age at which you can first receive a pension or annuity if you aren't disabled.

It's possible that your state doesn't treat this as taxable income.

[TD27]

Thanks JohnW152

After going over my income data several times with TurboTax the thing that got me confused when asked or prompt on next page - something like you entered xxx taxable dollar/ A yes/no prompt.    In the end after going to the summary inputting all the numbers, I saw then Turbo Tax had it as nontaxable.   FYI - for PERS/LE it was disability settlement upon retirement as non taxable income for retirement. 

[Longraven1]

TD27.  Similar issue relating to my 1099R . Specifically Service Member LE ( San Diego) duty related injury causing my retirement.   My 1099 R box 7 is populated as CODE 3 ( no pun intended).   Box 2a (taxable amount is 0).    This is a non taxable income due to the nature of disbursement.

I receive a request every few years from the IRS  requesting an explanation why my disability retirement is non-taxable.  I dutifully send them the documentation each time.

My issue for 2021 ( not yet resolved) relates to the fact that even though I enter my 1099r info in TT, it does not auto populate the appropriate lines (5A and 5B ) on the 1040 .  

DOUBLE CHECK YOURS

To the IRS it appears as though I failed to report because they have the 1099r from my employer .

To me, it appears as though I’ve reported it because I’ve entered it and it is listed in the docs list under tools in TT.

I was audited as a result of the “failure to populate” issue.

I’ve completed my taxes and discovered the same “failure to populate” line 5A and 5b.  Absent TT software updates my only recourse it to print, complete manually and snail mail the return.

I have an agent on the job attempting to resolve the issue.  Hopefully a fix will happen for this years filing.

in the meantime… best of luck and keep you service related disability documentation handy.