No. No need for a form 4852. You can enter the amount of 2023 retirement pay that was reported on your Form 1099-R as taxable income, but which subsequently became non-taxable under IRS Revenue Ruling 78-161, in the Wages and Income section using the “Less Common Income” topic. Here is an IRS reference letter affirming the Strickland Decision.
If you haven’t already, in the Wages and Income section using the “Retirement” topic enter the 1099-R information for your military retirement just as your form 1099-R reads.
Next, you will enter the non-taxable amount you calculated as a negative (-) number using the “Less Common Income” topic with these steps:
- Click Wages & Income in the left hand menu
- Scroll down to the “Less Common Income” topic and open the dropdown menu
- Scroll down to “Miscellaneous Income” and click Start
- Scroll down to “Other Reportable Income” and click Start
- Click Yes
- Enter “IRR 78-161” in the description box
- Enter the non-taxable amount as a negative (-) number
- Continue
- Done
The end result will be line 5 on your 1040 showing the form 1099-R information as received by you and the IRS and the non-taxable income subtracted out as a negative entry on line 8z of Schedule 1 and labeled “IRR 78-161”.
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