my pension plan closed and I was given several options to receive my payout. I elected to start receiving payments monthly from an annuity immediately, although I am not retired yet. I am 62 in 2024.
turbo tax asked a question about whether the annuity is qualified as a pension. I assume that it is because that was the purpose, but technically it is no longer a pension but an annuity to replace my pension. How should I handle this in my tax return.
thanks.
Annuity payments from a qualified retirement plan are generally considered a qualified annuity disbursement, since this was an annuity that's funded with pre-tax money, such as contributions to a retirement plan. It would not appear that this an annuity that is not used to fund a tax-advantaged retirement plan, which is a non-qualified annuity.
So, this is qualified annuity disbursement from your pension plan.
Thank you for the opportunity to answer your questions @ppalm
All the best,
Marc T.
TurboTax Live Tax Expert
The term Qualified Plan has specific meaning under the Internal Revenue Code. Typically most employer pension/annuity plans are Qualified. Even though your pension "closed" it may still be considered Qualified since annuity payments are ongoing, if it still meets all requirements. Here is an article about Qualified Plans for you to review: https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/qualified-retirement-plan/L2t9KGcGv_US_en_US
To be sure, you may wish to reach out the administrator and verify.
Hope this helps.
Susan
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Annuity payments from a qualified retirement plan are generally considered a qualified annuity disbursement, since this was an annuity that's funded with pre-tax money, such as contributions to a retirement plan. It would not appear that this an annuity that is not used to fund a tax-advantaged retirement plan, which is a non-qualified annuity.
So, this is qualified annuity disbursement from your pension plan.
Thank you for the opportunity to answer your questions @ppalm
All the best,
Marc T.
TurboTax Live Tax Expert