Problem with not being able to finish taxes due to clitch with Turbo Tax program. It isn't recognizing that our annuities do not require RMD. It has been 10 days since we discovered this problem. We confirmed that we have Non Qualified Contracts.

[Meesha01]

Please help us with the above problem as we are unable to file until TT solves their problem.

[MarilynG1]

All 1099-R's indicate some sort of 'Retirement Distribution'.  Even though that doesn't apply to some annuities (you probably have a different amount in Box 1 and Box 2a), you may still get the RMD question.

You can choose 'all or part of this distribution was RMD' and enter the Box 1 amount as the RMD amount as a workaround.  This does not affect your return and is not reported to the IRS.

Here's more info on 1099-R for Pensions, Annuities, Retirement.

@Meesha01 

[Meesha01]

We have tried all of that with $0 in the RMD amount.  It still shows us owing $5000 + dollars as not taking our required distribution.   IF we did have to take an RMD on the 2 annuities, we would have taken more than what was required, and an agent at Turbo Tax walked us through all possible options and still showed us owing.   

[Meesha01]

Also Box 1 and box 2a are the same.

[DaveF1006]

Yes, non-qualified annuities don't have an RMD requirement. ‌Review your entries and see if you reported this correctly.

1. Let's assume you have $50,000 taxable income for Box 1 and 2A and the distribution code is 7 in Box 7. After entering the 1099R, continue through until it asks was this a distribution from a Qualified plan. Here you would indicate this was from a non-qualified plan. 
2. Now continue.  Make sure you don't check the box asking if this is from an IRA, Sep/Simple account.
3. Now, continue through the screens where it asks if you missed a RMD payment from any qualified retirement accounts. Here, you will say no, unless you have other distributions from qualified plans.

[Meesha01]

We have put 7 D as what it says in the boxes.   We also have done what you said and it keeps going around in circles.   We have  had at least 3 TT experts try it and they have realized their is a problem.   We are hoping you had an answer knowing the program.    Do we need to clear cookies and the Cache as someone else suggested?   We are extremely stressed as we always file by now and are just waiting on this issue.   if it hasn't been "fixed" in 10 days, do you think it will?    Under the question is it a 403 c or something like that, and you answer no, why don't they have more choices, like a non qualifying contract, annuity, etc.????? That may help the program...... 

[AmyC]

I helped someone else get their inherited nonqualified annuity through so the steps should work for you.  Before you start:

1. Delete the 1099-R
2. Clear cache and cookies  
3. Change the browser you are using

Your 1099R should have box 7 with a code D for nonqualified annuity. Box 7 does not need code 7.  Code 7 is for regular distributions like a 401k. If it isn't on your form, take it off. See Table 1. Guide to Distribution Codes.

Let's go through the steps:

1. Open your return to the federal income
2. Select the 1099-R and edit
3. taxable amount -if box 2a has no amount or needs to be determined, the program will ask about cost basis. If 2a has a number and you select to use it, the program will not ask about the basis.
4. continue to Enter the form,
5. No Public Safety Officer
6. Age of person - before of after Jan 1, 1952.
7. select no or yes
8. select 403b plan - I know it's wrong, we just want the forms to be right
9. RMD, enter zero - another bad answer since there is no RMD but should make the program work
10. continue

Reference: Publication 575 (2023), Pension and Annuity Income

If this fails, you can switch to the desktop version. You can go into forms mode and force the correct handling. It's pretty easy to do. Your software moves your .tax file and you pick up where you left off. See How do I switch from TurboTax Online to the TurboTax software?

[BESTax]

Just enter the amount form Box 1 as the RMD as a work around.  For 2024 it no longer asks if ALL of this is RMD.  It asks for an amount.  

If you enter $0.00 the software assumes you did not take the full RMD required and calculates 25% excise tax on the amount not withdrawn as required.

This has caused some confusion for many tax payers.

It does not affect your return with the IRS.