What are the distribution codes?
Review the distribution codes below:
- 1 – Early distribution, no known exception.
- 2 – Early distribution, exception applies.
- 3 – Disability.
- 4 – Death.
- 5 – Prohibited transaction.
- 6 – Section 1035 exchange.
- 7 – Normal distribution.
- 8 – Excess contributions plus earnings/excess deferrals taxable in 20YY [current tax year]
What do the distribution codes mean on 1099-R?
Form 1099-R Distribution Codes for Defined Contribution Plans
| Distribution Codes | Explanation |
|---|---|
| Code B: Designated Roth account distribution. | Use Code B for a distribution from a designated Roth account. |
| Code E: Distributions under Employee Plans Compliance Resolution System (EPCRS). | Use for 415 Corrections. |
What are the retirement distribution codes?
1099-R distribution codes
- Code 1: Early distribution, no known exception.
- Code 2: Early distribution, exception applies.
- Code 3: Disability.
- Code 4: Death.
- Code 7: Normal distribution.
- Code 8: Corrective refunds taxable in current year.
- Code G: Direct Rollover to a qualified plan, 403(b), governmental 457(b) or IRA.
What is a distribution code 7 on a 1099-R?
Use Code 7 in box 7 for reporting military pensions or survivor benefit annuities. Use Code 4 for reporting death benefits paid to a survivor beneficiary on a separate Form 1099-R. Do not combine with any other codes.
What is a distribution code 7?
Code 7. Use code 7, Normal distribution, when the IRA owner or plan participant is age 59½ or older (use code 1 if the individual is age 59½ or older but modified a series of substantially equal periodic payments before five years).
What is distribution code 8?
Code 8 indicates a distribution of an excess contribution from an employer plan. This distribution is not eligible for rollover and the amount shown in box 2a is the amount that is taxable on your tax return.
What does Distribution Code 1B mean on a 1099-R?
a early distribution
A code 1B indicates a early distribution (under age 59 1/2) from a Designated Roth account. Usually the box 2a is the taxble amount. Enter the 1099-R’s and answer the follow-up questions to determine the actual taxable amounts.
What does Distribution Code 2 mean on Form 1099-R?
Early distribution, exception applies
Code 2, Early distribution, exception applies, lets the IRS know that the individual is under age 59½ but that he or she qualifies for certain exceptions.
What is distribution code 7d?
7 is the code for Normal Distribution (which means it was distributed to taxpayer after age 59.5). D is the new ‘nonqualified annuity distribution code’. The taxable amount of the distribution should still be indicated in Box 2a based on the differing rules depending on when the annuity was purchased.
What is IRA Distribution Code 4?
If a “4” appears, it means you took a distribution from a tax-deferred retirement account and you are exempt from the early distribution penalty as the distributions were made after the original account holder’s death.
What is 7d distribution code?
What is a distribution code 2 on a 1099-R?
Code 2, Early distribution, exception applies, lets the IRS know that the individual is under age 59½ but that he or she qualifies for certain exceptions. the individual qualifies for a penalty tax exception that doesn’t require using codes 1, 3, or 4.