To designate an inherited annuity from a nonqualified plan you would Go to: The 1099-R may have a 4 of 7 in Box (7) If it's a 4 it represents the decedent's death. If it's a 7 it's a normal distribution Wages & Income IRA, 401(k), Pension Plan Withdrawals (1099-R) Select your plan Continue through screens until you get to the input screen The IRA/SIMPLE/SEP box should not be checked Continue the interview Where is your distribution from? None of the above What kind of retirement plan do you have with XXXX? = Non-qualified plan Includes life insurance policies, private or purchased commercial annuities, and military retirement plans

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tcoryell333

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How do I designate an inherited annuity was from a nonqualified plan when entering the 1099R into Turbo Tax?

Forum|Forum|4 years ago
March 20, 2022
2 replies
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TurboTax Deluxe Online

Best answer by dmertz

The payer should have included code D in box 7 if the distribution was from a nonqualified annuity is generally sufficient for TurboTax to treat it as such.

JohnB5677

To designate an inherited annuity from a nonqualified plan you would Go to:

The 1099-R may have a 4 of 7 in Box (7)

If it's a 4 it represents the decedent's death.

If it's a 7 it's a normal distribution

Wages & Income
IRA, 401(k), Pension Plan Withdrawals (1099-R)
Select your plan
Continue through screens until you get to the input screen
The IRA/SIMPLE/SEP box should not be checked
Continue the interview
Where is your distribution from? None of the above
What kind of retirement plan do you have with XXXX? = Non-qualified plan
1. Includes life insurance policies, private or purchased commercial annuities, and military retirement plans

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tcoryell333Author

Thank you so much for your reply. When following your instructions step 7. The program asked about RMD's instead of where is this distribution from. I entered none was and RMD, giving me no other options to enter nonqualified?

dmertzAnswer

The payer should have included code D in box 7 if the distribution was from a nonqualified annuity is generally sufficient for TurboTax to treat it as such.

dp001

TurboTax Online version started asking the following question on 3/6/25 about a 1099-R distribution I entered for a Non-Qualified Stretch Annuity I inherited (1099-R Box 7 is 4D). Neither of the answers to the question below are correct for this 1099-R. I can’t find a way to resolve this Federal Tax Review error. If I select No, it produces additional errors because the 4D distribution code is for a death distribution from a non-qualified annuity. Fixing the new errors loops back to the issue / question below again. Please post a solution or have the software development team fix this bug so I can file my taxes.

Was This Distribution From a 403(b) Plan?
- Please read below and take any necessary actions.
- The distribution rules are slightly different for 403(b) plans compared to other more common qualified retirement plans, like 401(k)s. (These plans are similar to 401(k) plans, but typically only offered by public schools and certain charities.)

Answer #1: Yes, this is a 403(b) plan
Answer #2: No, it's another type of qualified retirement plan

dmertz

The developers messed up the question sequence for this situation and TurboTax should not be asking this question when code D is present. Presently, the only way to get TurboTax to accept this Form 1099-R with codes 4 and D entered is to correct the entry in forms mode of the download version of TurboTax. You, might be able to get a reasonable result by omitting the code D and answering a question that asks if the distribution is from a nonqualified plan or a qualified plan (it's from a nonqualified plan), but I'm not sure.