On my 1099-R, what do the codes in box 7 mean?
This article reviews the codes found in Box 7 to help you identify the type of distribution you received.
1 - Early distribution, no known exception (in most cases, under age 59 1⁄2 ). For a rollover to a traditional IRA of the entire taxable part of the distribution, do not file Form 5329. See the Form 1040/1040A instructions.
2 - Early distribution, exception applies (under age 59 1⁄2 ).
3 - Disability.
4 - Death- regardless of the age of the employee/taxpayer to indicate payment to a decedent's beneficiary, including an estate or trust. Also use for death benefit payments made by an employer but not made as part of a pension, profit-sharing, or retirement plan.
5 - Prohibited transaction: means the account is no longer an IRA
6 - Section 1035 exchange (a tax-free exchange of life insurance, annuity, long-term care insurance or endowment contracts).
7 - Normal distribution.
8 - Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2012.
9 - Cost of current life insurance protection
A - May be eligible for 10-year tax option (see Form 4972).
B - Designated Roth account distribution.
* If Code B is in box 7 and an amount is reported in box 10, see the instructions for Form 5329
E - Distributions under Employee Plans Compliance Resolution System (EPCRS)
F - Charitable gift annuity.
G - Direct rollover and rollover contribution (other than a designated Roth account distribution) to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA.
H - Direct rollover of a designated Roth account distribution to a Roth IRA.
J - Early distribution from a Roth IRA, no known exception (in most cases, under age 59 1⁄2 ).
L - **Loans treated as distributions**.
N - Recharacterized IRA contribution made for 2012 and recharacterized in 2012
P - Excess contributions plus earnings/excess deferrals taxable in 2011.
Q - Qualified distribution from a Roth IRA. (Participant meets the 5-year holding period and: 1) has reached age 59 1/2, 2) has died, or 3) is disabled.)
R - Recharacterized IRA contribution made for 2011 and recharacterized in 2012.
S - Early distribution from a SIMPLE IRA in first 2 years, no known exception (under age 59 1⁄2 ). May be subject to an additional 25% tax.
T - Roth IRA distribution, exception applies: Use for a distribution from a Roth IRA if you do not know if the 5-year holding period has been met but: 1) participant has reached age 59 1/2, 2) has died, or 3) is disabled.
U - Dividend distribution from ESOP under sec 404(k). NOTE These are not eligible rollover distributions.
W - Charges or payments for purchasing qualified long-term care insurance contracts under combined arrangements.
**If a loan is treated as a deemed distribution, it is reportable on Form 1099-R using the normal taxation rules of a retirement account. The distribution also may be subject to the 10% early distribution tax under Section 72(t). It is not eligible to be rolled over to an eligible retirement plan nor is it eligible for the 10-year tax option. On your Form 1099-R, enter Code L in Box 7. Also enter Code 1 or Code B, if applicable. With that being said, within your TaxSlayer Form 1099-R, you would enter "L1" for Box 7.