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What am I doing wrong? How do I proceed?

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Level 1

Military pension disability exclusion question.  I have a client receiving a military pension for years of service.  Three months military retirement, he was diagnosed as 70% disabled due to military activity.  Based on Pub 525, I believe the 70% should be excluded from his taxable military pension income.  However, his 1099R shows an amount, taxable amount (both the same) and a code 7 (normal distribution).  On the "General Rule" screen of the 1099R section within PTO, there are fields called "Exclusion percentage" and "Exclusion amount."  When I enter 70, .70 or dollar amount, PTO is not calculating/excluding any amount.  What am I doing wrong? How do I proceed?

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Level 15

VA disability payments don't normally show up on a 1099R.  Are you sure you aren't dealing with two separate payments?

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

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Level 10
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Level 15

VA disability payments don't normally show up on a 1099R.  Are you sure you aren't dealing with two separate payments?

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

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Level 1
Yes. I’m sure. The taxpayer stated he receives VA disability payments and military pension payments separately.
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Level 15
But that's what I'm saying.  The 1099R payments should reflect just the military pension.  The disability payments are not reported on 1099.
ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
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Level 9
Level 9
IRonMaN is correct.
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Level 15
I think that is the second time this year.  I'm on a roll :roller_coaster::roller_coaster:
ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
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Level 15
But ya' only get two...so now you have to wait until January :joy::joy:
Former Chump... umm.... AllStar.
If a post answers your question, click on *Accept as solution* for future searches
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Level 15
It will take that long before I get another one right :grimacing::grimacing:
ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
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Level 1
You guys are hilarious. 🙂 That's for your help thus far.  The 1099R shows just the military pension income and not any disability income.  The two are paid separately to the taxpayer's bank account.  The 1099R shows $31K of taxable military pension.  Based on the 70% disability, it is my understanding per Pub 525, Example 19, the taxpayer should only have taxable military pension income of $~9,300 (30% of $31K as 70% should be excluded).  My instinct is to enter the $31K from the 1099 into PTO, excludes the 70% and send the VA letter with the tax return.  However, PTO is not recognizing any values when I enter the 70% exclusion on the "General Rule" screen of the 1099R section within PTO.  Should I just enter $9,300 then and attached the 1099R and VA letter to the mailed return?
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Level 15
Look at the client's bank statements.  Do the total deposits for both pensions equal the 1099R?  If not, everything is being handled correctly.  The disability was not reported on the 1099R and there is nothing extra for you to do than enter the 1099R as fully taxable.
ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
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