Doing my 2016 taxes. I changed jobs last year and received a lump sum distribution from my NQDC plan. Which form should I report the income on? I just have the stub that says to retain it for tax purposes and that it's being reported to the IRS. From what I've read online some say it should be included on the W2 but that's not the case. Some say to report it on a 1099-R. I participated in the NQDC plan until the last paycheck so both the deferrals and the distribution happened in the same tax year if that matters.
Which tax form to report a lump sum distribution from non-qualified def comp plan?
- Thread starter dvalley
- Start date
Found this on TurboTax website. Sounds like it's not subject to FICA (I was surprised by that) so 1099-Misc is the way to go.
https://ttlc.intuit.com/questions/2726937-how-is-a-deferred-compensation-withdrawal-reported
https://ttlc.intuit.com/questions/2726937-how-is-a-deferred-compensation-withdrawal-reported
meierlde
Thinks s/he gets paid by the post
Reading an IRS site it implies there should have been withholding on the lump sum: https://www.irs.gov/businesses/corp...-deferred-compensation-audit-techniques-guide This audit guide on NQDC implies that they should be reported on the W2. With appropriate adjustments to the medicare and social security wage boxes.
Actually the best way to check is to the the instructions for form W-2 from the IRS web site. It says on page 11 that NQDC comp goes on a W2 and provides details of what other issues need to be tracked.
Back in 2004 when I retired I was able to defer the severance to 2005 and 2006. (from a MegaCorp) these showed up on the w-2s issued for those years as well as social security taxes on the amounts, which actually was a good thing as it added 2 more years to my Social Security earnings period taking it up to 30 years.
Actually the best way to check is to the the instructions for form W-2 from the IRS web site. It says on page 11 that NQDC comp goes on a W2 and provides details of what other issues need to be tracked.
Back in 2004 when I retired I was able to defer the severance to 2005 and 2006. (from a MegaCorp) these showed up on the w-2s issued for those years as well as social security taxes on the amounts, which actually was a good thing as it added 2 more years to my Social Security earnings period taking it up to 30 years.
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Retire2017
Dryer sheet wannabe
If the lump Sum was directly rolled over into an IRA, do I need to file any tax forms? Thx.
Big_Hitter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
nqdc you probably paid fica annually as it was accrued
but yes, you will owe fed/state tax on it
but yes, you will owe fed/state tax on it
That's what I'm reading...the FICA was paid when the contributions happened but the money was sheltered from the income tax. Now that I took the distribution I'd now owe the income taxes on the entire sum (which includes a few years of contributions). Still no response from TaxAct yet as to how to report it.
Big_Hitter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
pretty sure it's ordinary income but i could be wrong
So TaxAct reponded with:
A review of data entered indicates that you may have already resolved your issue of reporting the lump sum distribution from the retirement plan at your former employer. The distribution should be reported to you on Form 1099-R.
A review of data entered indicates that you may have already resolved your issue of reporting the lump sum distribution from the retirement plan at your former employer. The distribution should be reported to you on Form 1099-R.
Big_Hitter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thanks! sounds pretty clear, I'll create a new W2 in TaxAct and report it there. I'll use the payer info of the account management company rather than my employer so the IRS can match up the tax ID info. Somehow I get the feeling the IRS is going to come back to me on this one.
Normally you should get a W2 and it will indicate that it is an NQ plan distribution. I think there is a value that goes in Box 1 and Box 11 but I am working from memory since I haven't looked at my W2 since I filed in October.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
OP, I think you're putting the cart before the horse... your former employer should report it to you and to the IRS on Form W-2 (or perhaps Form 1099)... for them to decide... and then you report it consistent with the way they report it (unless they screw it up... in which case that is a whole different question).
Given that it is so early in the new year... why are you jumping the gun?
Given that it is so early in the new year... why are you jumping the gun?
No worries, I guess I'll wait until I get something something else from the former employer. Since they already sent me the W2 without the NQDC stuff on it I presumed that's all I'd get. Just want to know how much of a hole I'm in for the taxes this time 
You can figure that out without a W2. It is ordinary income and gets reported on Line 7.No worries, I guess I'll wait until I get something something else from the former employer. Since they already sent me the W2 without the NQDC stuff on it I presumed that's all I'd get. Just want to know how much of a hole I'm in for the taxes this time
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
No worries, I guess I'll wait until I get something something else from the former employer. Since they already sent me the W2 without the NQDC stuff on it I presumed that's all I'd get. Just want to know how much of a hole I'm in for the taxes this time
Why don't you call your former employer and ask them?
