Drake Tax - 1040: 1099-R EF Message 5306

How to clear EF Message 5306 in an individual return

To clear EF Message 5306, 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, select statement 011, and enter an explanation. This prints STATMENT #1 in View/Print mode along with the literal Statement #1 beside "Other earned income" on Form 1040.

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