Pension - taxable earnings for retirees moving from periodic pymts to lump sum/rollover

Legacy Contributor

Occasionally we have a retiree who will move from monthly annuity payments to a lump sum or direct rollover payment within the same tax year. When we issue the lump sum/rollover payment, the taxable earnings from the annuity payments is recorded with the lump sum/rollover payment. This taxable amount is then reported on the 1099R for the lump sum/rollover.

We have determined that we can enter a B in the Tax Exempt flag on PR13.1 for both federal & state taxes to prevent this from happening with direct rollovers since those dollars are not taxable. We cannot do the same for lump sum payments since those dollars do need to be reported as taxable.

Have others who are using the pension module in Lawson experienced the same? If so, how have you resolved this?