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11827: 1040 - 1099-R EF Message 5306


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How do I clear red message 5306 in an individual return?

 

1040 EF Message 5306 states:

 REQUIRED STATEMENT MISSING: On a screen 1099, the "1099-R for disability" check box and the "If so, reported as wages on the 1040?" check box have been marked. The IRS requires a statement explaining why the 1099-R income should be reported as wages.

Open the SCH screen (available from the "SCH" link on the 1099 screen or the "Miscellaneous" tab of the Data Entry Menu) and from the "Type of attachment" drop list, select "12." In the text box in the middle of the SCH screen, type an explanation of why this 1099-R income should be considered wages.

To clear this message, go to the 1099 screen in data entry of the return.

Under the heading Additional Information for this Distribution, check to see if the following selections have been made:

1099-R for disability?
If so, reported as wages on the 1040?

If the second selection has been made, IRS requires an explanation as to why the disability income is reported as wages. Go to the SCH screen (or use the SCH link on the 1099 screen) and fill in the necessary information. Be sure to mark the Statement number field as 12 and enter a Title for the statement.

View the return. Check line 1 (line 7 in Drake17 and prior) of the 1040 to make sure that a statement reference exists.  Next, look for the statement page to be sure it matches the reference.

For more information regarding the reporting of disability income as wages, see Pub. 525, Taxable and Nontaxable Income.


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