1099 - r

[smstringer]

I have a customer that received a 1099-R the amount distributed was not taxable which has a code 7D. Her agi before the 1099 R was little over 16,000. She qualified for subsidy with ACA. I tried inputting the 1099-R excluding the $40,000 and placing the $3,000 in box which really is what is taxable and the system will not allowed me to electronically file. When I put the total distribution amount it allows me to file it.

I did contact the financial institution and they confirmed the amount distributed is non-taxable.

Help!

[BHoffman]

What distribution code did you enter? I can help you if you use Drake software.

D is the non qualified annuity distribution code. "7D" means over 59.5 years old, AND non qualified annuity. Box 2a is your taxable amount.

I don't know how your tax software is configured but am going to guess data entry of the distribution code might be causing the problem.

[smstringer]

I am using Tax Wise. I entered the information just as it is on the 1099R Box 2 is blank. Within the software on the 1099R I entered the exclusion amount. What is happening once the income is added it penalize her for over payment for the ACA subsidy dollars.