Pension income

[doug4654]

Why does TurboTax Deluxe ask if my Federal pension income reported on form CSA-1099-R is an RMD withdrawal?  Seems to me this question is irrelevant and should not even be asked as RMDs do not apply to Federal pension income.  The screen with this question appears directly after the screen asking the amount on CSA-1099-R Box 5 that applies to health Insurance.

[DawnC · Accepted solution]

All retirement accounts, even pensions, must meet the required minimum distribution requirements.  Since you are receiving monthly payments through the pension, you are meeting the RMD requirements.  The answer to that question is simply to make sure you do not owe any penalty for not taking the required minimum distribution.   Since pension plans fall under Sect. 401 and require an RMD after you are 70.5, you need to answer YES to that question, and ALL to the next question, so the TurboTax does not generate a penalty.  

[Bradrm]

I can't say that I understand that pension income has a RMD requirement in that a pension is paid monthly for life. The amount increases as a result of a COLA adjustment over time but it will never increase because one grows older.  I spent an hour this afternoon searching for where to enter pension income while doing my tax return. In past years Turbo Tax specifically asked about pension income. I finally gave up looking for an answer here in the support community & called support to discuss this with a live person. She essentially said to enter it as if it was the same as an IRA distribution. This was one of those times when it makes no sense to question the answer received because it isn't going to get you anywhere! I also received an email answer to my inquiry but this email is specifically why I had to call because it doesn't answer the simple question as to where one would enter this info. A pension is quite different from an IRA withdrawal but Turbo Tax seems to have lumped in into one item. Maybe next year Turbo Tax will see the light & clarify this......I hope?

[macuser_22]

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@Bradrm wrote:

I can't say that I understand that pension income has a RMD requirement in that a pension is paid monthly for life. The amount increases as a result of a COLA adjustment over time but it will never increase because one grows older.  I spent an hour this afternoon searching for where to enter pension income while doing my tax return. In past years Turbo Tax specifically asked about pension income. I finally gave up looking for an answer here in the support community & called support to discuss this with a live person. She essentially said to enter it as if it was the same as an IRA distribution. This was one of those times when it makes no sense to question the answer received because it isn't going to get you anywhere! I also received an email answer to my inquiry but this email is specifically why I had to call because it doesn't answer the simple question as to where one would enter this info. A pension is quite different from an IRA withdrawal but Turbo Tax seems to have lumped in into one item. Maybe next year Turbo Tax will see the light & clarify this......I hope?

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Virtually all pension plans, defined contribution plans, and annuities in existence today fall under section 401 of the tax code.

Required minimum distributions for defined benefit plans and annuity contracts all require RMD's after age 70 1/2.  If you receive periodic (monthly) payments from any pension plan you can be assured that the custodian of the plan is meeting the requirements so you can safely answer "yes" to the question.

The rules that the plan administrator must use to calculate the RMD as required by §401(a)(9) are defined in § 1.401(a)(9)-6) of the Internal Revenue Code (IRC).

The answer to the question does not go on your tax return, it is simply to make sure you do not owe any penalty for not taking the RMD or use it for an ineligible rollover.

The question is just to be sure that the requirement was met.

https://ttlc.intuit.com/replies/3302117

[afftonmo]

agreed, i have a friend who thinks her husbands pension has a penalty attached because he is 58.  she is unaware that if its a systematic payment , the penalty should be avoided.  they are not helping with using IRA and pension in the same vernacular.  

[patem]

OK, but this is confusing.  Glad someone else asked the question before me.