RMD + City Pension

[LB641]

When entering our city pensions, TT asks if the "withdrawal" was an RMD? Then it asks how much of it was RMD. I have a private retirement account, and that fund contacts us and we determine how much to take out each year to meet minimums. However, one does not dictate to the city or state regarding city/state "pensions". Nor does the city/state pension administrator contact us to select how much we want to take out to meet minimums. We don't have a say in that. Is TT not aware that pensions from city/state are run by pension administrators, and we have no communication with them about our pensions and RMD.? Nor are we told how much of our pension is RMD. TT needs to rethink and rework this question, as we are not sure what the answers are, nor do we need issues with the IRS.

[robtm]

A pension does not require an RMD. An RMD is required only from an IRA if you are 72 or older. you should answer 0 to the question.

[SteamTrain]

Once you reach age 72, the RMD question is asked about every 1099-R form that is entered.

For pensions, where you have no control over the $$ amount sent, you just indicate that it was an RMD, and that all of it was an RMD.

________

Why can't TTX bypass that for fixed pensions/annuities?

There is no easy way for the software to detect that situation.  The standard 1099-R is also used for other non-IRA retirement account distributions, like a 401k/TSP funds....where the user does have to make sure they get the appropriate RMD amount. 

[LB641]

You say answer "NO" to the RMD, and then "0" for the amount? Yet others are saying YES and ALL. This is a City pension where we have no control over. Even the city folks seem confused as to the question, and how to answer. Sounds like this can get us in hot water with the IRS for a wrong answer.

[LB641]

Here is what just one other post/answer says. And it adds confusion.....  Not all pension or 1099-R's are RMD. 

Virtually all pension plans in existence today fall under section 401 of the tax code and they all require RMD's after age 70 1/2.  The question in TurboTax is just to be sure that the requirement was met.  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.

Are pension plans considered an rmd? The pension plan as an RMD, No.  The income form a pension/retirement plan if you are age 70 1/2 or older, Yes all the pension/retirement income is an RMD. Say all of it is the RMD.  If you are 70 1/2 it will ask you if it is the RMD.  Say yes.  Anything your pension pays you is considered to be the  RMD.  Traditional pensions automatically fulfill the rules of an RMD.

Say all of it is the RMD.  If you are 70 1/2 it will ask you if it is the RMD.  Say yes.  Anything your pension pays you is considered to be the  RMD.  Traditional pensions automatically fulfill the rules of an RMD.

So is it NO and 0. Or yes and ALL. 

[LB641]

A "City" Pension is not an IRA, not a 401, and not a Roth. It is a City Government Pension, that has a Pension Administrator. We who receive the City Government Pension have no say so as to what our yearly or monthly minimum distribution amounts/checks are. Yes, we have private retirement accounts where the Fund contacts us and we make decisions on what the minimum distributions are. That is a RMD and I can see that my answer for that 1099-R is going to be YES it is an RMD, and "ALL" of it RMD. However, as in this thread and others I have read, some say YES and ALL, Some say yes and 0, And some say NO and 0.  The question here is regarding a City Government Pension, administered by a city pension administrator, and one that is not a private IRA, 401, or Roth. So how is the TT question answered? YES and ALL or NO and 0? No one needs to get into an issue with the IRS over a poorly worded question, and one that could apply to many kinds of 1099-R's. Thanks to all......  Perhaps a tx expert in this field could provide some incite.

[JulieS]

Yes, all of your pension distribution is an RMD and you can assume that your entire RMD with respect to this account was taken. 

[LB641]

Update: I contacted the pension folks at city payroll. They were unsure, as this question has not come up previously. They looked at the various community posts regarding RMD and pensions. And like many of us, were confused, as there seemed to be various answers and thoughts on the matter, as to make it unclear. They then called the attorney and were informed that our city pension is not subject to RMD, the pension payments are not RMD, and no amount of the monthly pension checks are RMD. In our case, the answer is NO. It would be nice if TT did a better job at asking the question. A primary or subsequent question could and should be "Is your pension subject to RMD?" That could be the first question, or it could be a follow up question to answering NO to the current question. 

[JohnB5677]

The attorney is correct.  The reason for an RMD (Required Minimum Distribution) is that the IRS wants to get the taxes that have accumulated in the money saved in 401-K's, IRA's and other retirement vehicles.   

Pensions do not have a pool of money that is designated specifically for you.  Pensions end when you pass, (some plans allow for a spouses continued benefit at a reduced rate).  There is no accumulation of wealth for the IRS to tax.  So, if you have a pension, you do not have to be concerned about RMDs.

@LB641 

[SteamTrain]

@dmertz    You want to comment on this? 

OR let all these folks thrash it endlessly?

[dmertz]

This question being posed by TurboTax has nothing to do with ensuring that any distribution requirement was met.  What TurboTax is really asking in a roundabout way is how much of the distribution is ineligible for rollover.  Pension distributions made periodically are generally not eligible for rollover, so are considered in this context to be entirely RMDs.  Because the only reason that TurboTax asks the question is to determine how much is eligible for rollover, if you didn't roll any of the distribution over, it doesn't matter what answer you give.