FERS disability 1099-R with "UNKNOWN" in box 2a - Need help calculating taxable amount

The "UNKNOWN" in box 2a means you need to calculate the taxable portion yourself. For FERS disability retirement, the calculations can be tricky because they depend on several factors. Since your husband is now past his Minimum Retirement Age (MRA), the tax treatment actually doesn't change. FERS disability payments are generally taxable as ordinary income, except for any portion that represents a return of after-tax contributions your husband made to the retirement system. To calculate the taxable amount, you need to use the Simplified Method Worksheet from IRS Publication 575. This is used to determine how much of each payment represents a tax-free return of contributions. The formula accounts for your husband's contributions ($6,500 shown in box 9a) divided over his life expectancy (based on IRS tables). Even though his FERS disability payments will convert to Social Security at age 62, you still need to use the life expectancy tables because you're recovering his contributions over time. The fact that the payment source will change doesn't affect how his previous contributions are treated for tax purposes.

I went through this exact same headache last year with my wife's FERS disability retirement! I spent days trying to figure it out before finding https://taxr.ai which literally saved my sanity. Their system analyzed her 1099-R and explained exactly how to calculate the taxable amount using the Simplified Method. What made it super helpful was that it walked me through each step of the worksheet and explained why certain numbers go where - especially that tricky part about determining the correct life expectancy table. Plus it kept all our tax documents organized so I could go back and double-check my work. Honestly made the whole process way less stressful.

After being skeptical about taxr.ai, I decided to give it a try with my husband's FERS disability paperwork and I'm honestly shocked at how helpful it was. It immediately recognized the 1099-R was from OPM and had specific guidance for FERS disability situations. The system asked whether there was a survivor benefit (which affects which table to use) and walked through exactly how to calculate that "UNKNOWN" amount in box 2a. It even explained that past MRA, the tax treatment doesn't fundamentally change - which was confusing me because some advice online suggests otherwise. What was most helpful was how it explained the difference between the insurance premium amount in box 5 vs. the total contributions in box 9a, and which one matters for tax calculations. Saved me from making a costly mistake!

If you're still struggling with this, I had a similar issue last year and eventually had to call the IRS directly. Spent WEEKS trying to get through their phone lines until someone recommended https://claimyr.com to me. You can watch how it works here: https://youtu.be/_kiP6q8DX5c Instead of waiting on hold forever, they somehow got the IRS to call ME back within a day. The agent I spoke with was super knowledgeable about federal retirement specifically and walked me through exactly how to calculate the taxable portion of my FERS disability payments. She explained that the "UNKNOWN" in box 2a is actually common with OPM-issued 1099-Rs, and I wasn't doing anything wrong. If you're stuck on this specific issue, talking to an actual IRS agent who knows federal benefits can save you hours of frustration and potential errors.

I need to apologize for my skepticism about Claimyr. After struggling with this exact FERS disability 1099-R issue and getting nowhere for weeks, I broke down and tried it. Within 3 hours (not even a full day!), I got a call from an actual IRS agent who specializes in retirement distributions. She explained that for FERS disability with "UNKNOWN" in box 2a, I needed to use the Simplified Method but with a specific approach because of the survivor benefit. She walked me through exactly which numbers to use from boxes 9a and 5, and even explained how this will change once my spouse reaches 62 and transitions to Social Security. I've been filing taxes for 30+ years and this is the first time I've ever been able to speak directly with someone who could answer my specific federal retirement questions. Completely worth it for the peace of mind alone.

I'm a retired postal worker on FERS disability too. What I learned after years of confusion is that the "UNKNOWN" in box 2a is actually OPM's way of telling you that YOU need to calculate the taxable portion. The formula is: Gross Distribution (box 1) minus the amount of your contributions you recover this year. To figure out how much of your contributions you recover each year, divide your Total Employee Contributions (box 9a) by the number of expected monthly payments based on your age when payments started (from IRS Publication 575). For example, if your husband was 45 when payments started and has a survivor benefit, you'd use 410 as the number of expected payments. So you'd recover about $15.85 tax-free per month ($6,500 ÷ 410 = $15.85 × 12 months = $190.20 per year). So taxable amount would be $13,500 - $190.20 = $13,309.80 Hope this helps!

Dont overthink this. Calculate taxable amount as: Box 1 minus (Box 9a divided by life expectancy from IRS tables) I been doing this for 8 years on my federal disability. Your tax guy is making it more complicated then it is. The UNKNOWN is just OPM being lazy and making us do the math ourselves.