Drake Tax - 1099-R: Taxable Amount FAQs

If none of the gross distribution in block 1 on Form 1099-R is taxable, you must enter 0 in block 2a. If block 2a is left blank, the entire amount of the distribution entered in block 1 is treated as taxable.

This is true even if the block 7 is set to Q. There are situations where a distribution of Q can be taxable, so the software treats it as taxable until the user identifies a lesser taxable amount (or zero).

Code G indicates that it was a direct rollover to another plan or IRA. Generally, a rollover is not taxable, however, if you have determined that the amount should be taxable, you will need to make an adjustment on screen 3 to show the taxable amount. See the Form 1040 Instructions for details.

When the total distribution is taxable, no entry is required on line 4a or 5a (4a and 4c in 2019) per the Form 1040 Instructions. In this circumstance, only an amount will be shown on line 4b or 5b and nothing will be printed on line 4a or 5a. Only if there is a difference between the total distribution and the taxable amount are values printed on both lines 4a and 4b or 5a and 5b.

"Except as provided next, leave line 4a blank and enter the total distribution (from Form 1099-R, box 1) on line 4b."

"If your pension or annuity is fully taxable, enter the total pension or annuity payments (from Form(s) 1099-R, box 1) on line 5b; don’t make an entry on line 5a."

Unless the IRA/SEP/Simple box is also marked, when Form 1099-R has code 8 in box 7, the amount will flow to Form 1040, line 1 as earned income, instead of line 4.

For a list of codes available for box 7 of Form 1099-R, see the Form 1099-R Instructions.

A Form 1099-R is entered on the 1099 screen for distributions received. If the 1099-R distribution is being reported on another screen instead, mark the Exclude here; distribution is reported on... check box, under the Additional Information for this Distribution section, located on the bottom left of the 1099-R screen.

This tells the software not to carry the amount from the 1099-R screen, but to carry the 8606/ROTH screen entries to Form 8606 to calculate the taxable amount that flows to Form 1040, line 4b.

For more information on non-deductible IRA contributions, see the Form 8606 Instructions.

In prior years, if the amount is being reported on the 8915-D or 8915-E, the taxable amount will flow to line 5b.