Nonqualified Pension Plan

[david86303]

I have an amount in Form W-2 Box 11, a distribution from a non-qualified pension plan. The amount in W-2 Box 1 is lower by the amount of my employer's deduction for my health care plan, i.e., a "pre-tax deduction." Because the amount in Box 11 is now reported on Schedule 1 Box 8t, Turbo Tax creates a NEGATIVE AMOUNT in Form 1040 Line 1a. Will this cause a rejection of my Form 1040 submission? If so, how do I avoid this while following instructions for Schedule 1?

[Mike9241]

did the employer include box 11 in box 1?

w-2 box 11 instructions

Box 11. This amount is (a) reported in box 1 if it is a distribution made to
you from a nonqualified deferred compensation or nongovernmental
section 457(b) plan, or (b) included in box 3 and/or box 5 if it is a prior
year deferral under a nonqualified or section 457(b) plan that became
taxable for social security and Medicare taxes this year because there is
no longer a substantial risk of forfeiture of your right to the deferred
amount. This box shouldn’t be used if you had a deferral and a
distribution in the same calendar year.

[david86303]

Hi, Mike 9241

Thank you for responding to my query.

This amount IS in Box 1, as it is a distribution from a non-qualified plan to which I did not contribute.  The Box 1 amount does not include the amount deducted, "pre-tax", by my employer for my health care plan. The amount in Box 11 is the total distribution from the non-qualified plan, including the amount I never received that was deducted for the health care plan. So the  amount reported on Schedule 1 Box 8t is from W-2  Box 11. Because it is greater than W-2 Box 1, Turbo Tax creates a negative entry in Form 1040 Line 1a. This creates an error message in Turbo Tax that I am afraid will cause my return to be rejected.

[ThomasM125 · Accepted solution]

It seems that you actually received the amount reported in box 1 on your W-2 form, but box 11 reports that amount plus the health insurance premiums you paid. I believe the W-2 form may be reported incorrectly. You are correct, you won't be able to e-file the return with an error message like you described.

The best thing to do would be to get a corrected W-2 form. The next best thing would be to mail the return in. The last option would be to change the amount in box 11 to equal the amount in box 1 on your W-2 form, assuming that doesn't lower your tax. That may result in the IRS sending you a tax due notice however, which would entail you having to correspond with them to straighten the matter out.