How do I report my 1099-R? (IRA, 401K, pension/retirement income)

Form 1099‑R reports income received from:

• Pensions
• Annuities
• Retirement or profit‑sharing plans
• IRAs
• Insurance contracts

This income may be fully taxable, partially taxable, or non‑taxable, depending on the source and whether after‑tax contributions were made.

📍 Where to Enter Form 1099‑R

Navigation Path:

Federal → Income – Select My Forms →1099‑R, RRB, SSA → Add or Edit a 1099‑R

⚠️ Form 1099‑R cannot be uploaded or imported and must be entered manually.

📄 Common Boxes on Form 1099‑R

💰 Box 1 – Gross Distribution

• Enter the amount exactly as shown on the form
• Represents the total distribution received during the year

🧮 Box 2a – Taxable Amount

• Shows the portion of the distribution that is taxable
• If blank, this does NOT mean the distribution is non‑taxable
• It means the payer could not determine the taxable amount

➡️ In most pension and annuity cases, you must calculate the taxable amount using the Simplified Method Worksheet

✅ When Is the Simplified Method Required?

You must use the Simplified Method if all of the following apply:

📌 Required Conditions

• The distribution is from a pension or annuity (not an IRA), and
• The taxpayer has after‑tax contributions (basis), and
• The annuity starting date is after November 18, 1996

📄 The Simplified Method Worksheet is available directly on the 1099‑R entry screen in the program.

🚫 When the Simplified Method Is NOT Used

• IRA distributions (Traditional or Roth) → Use Form 8606 and the pro‑rata rule
• No after‑tax contributions → Entire distribution is taxable
• Annuity starting date before 11/19/1996 → The General Rule may apply instead

☑ Box 2b – Taxable Amount Not Determined

Check this box only if the taxable amount cannot be reasonably determined.

Special Rule for Traditional IRAs

For traditional IRA distributions, Box 2b is generally checked because:

• Payers are not required to track basis
• Box 2a usually equals Box 1

✅ Exceptions (Do NOT follow the general rule):

• Return of contributions + earnings before due date (IRC 408(d)(4))
  • Box 2a = earnings only
  • Box 2b not checked
• Excess contributions removed after due date (IRC 408(d)(5))
  • Box 2a blank
  • Box 2b checked
• Direct rollover to an employer plan
  • Box 2a = 0
  • Box 2b not checked

📦 Box 2b – Total Distribution (Separate Checkbox)

Check this box only if the amount in Box 1 represents a complete payout of the account

✅ For installment or periodic payments, check this box only in the final year, when the account balance reaches zero.

🧾 Box 4 – Federal Income Tax Withheld

Enter any federal tax withheld from the distribution

🔢 Box 7 – Distribution Code

• Identifies the type of distribution
• Indicates whether the 10% early distribution penalty may apply

How Do I Change the IRA/SEP/SIMPLE Checkbox?

If your Form 1099‑R shows that the distribution came from an IRA, SEP IRA, or SIMPLE IRA, you must make sure the IRA/SEP/SIMPLE checkbox is correctly marked when entering the form.

To update this checkbox:

• Go to Federal.
• Select Income.
• Choose 1099‑R, RRB‑1099, RRB‑1099‑R, SSA‑1099.
• Select the Form 1099‑R you previously entered (or add a new one).
• Locate the IRA/SEP/SIMPLE checkbox on the entry screen.
• Check the box if the IRA/SEP/SIMPLE indicator is marked on your paper form.
• Leave it unchecked if it is not marked on your paper form.
• Select Continue to save

🟣 Box 10 – In‑Plan Roth Rollover

• Applies only to taxpayers with an in‑plan Roth rollover
• IRS Publication 575 may be used to determine the taxable amount

🏛 Boxes 12–17 – State & Local Information

• If Box 14 (state withholding) is entered, Box 16 must have a value
• Box 16 usually matches Box 1 or Box 2a

🧑‍🦽 Reporting Disability Pensions (Form 1040 Line 1h)

✅ Check “Report on Form 1040, Line 1h” only if both apply:

• Distribution code is 3 (Disability), and
• Taxpayer has NOT reached the employer’s minimum retirement age

📌 Before minimum retirement age
→ Disability pension is treated like wages
→ Report on Form 1040, Line 1h

📌 On or after minimum retirement age
→ Treated as a regular pension
→ Report on Form 1040 pension/IRA income line, not Line 1h

🚫 Distributions Not Allowed for Form 8880

Some 1099‑R distributions do not qualify for the Retirement Savings Credit (Form 8880).
Use the “Does not carry to Form 8880” checkbox when applicable.

📎 Additional Resources

• 📘 IRS Publication 575 – Pensions and Annuities