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Category: General Questions

On my 1099-R, what do the codes in box 7 mean?

Box 7 of 1099-R identifies the type of distribution received. These codes descriptions are taken directly from the back of form 1099-R. 

Code

Definition

1

Early distribution, no known exception (in most cases, under age 59½).

2

Early distribution, exception applies (under age 59½).
3Disability.

4

Death – regardless of the age of the employee/taxpayer to indicate to a decedent’s beneficiary, including an estate or trust. Also used for death benefit payments made by an employer but not made as part of a pension, profit-sharing, or retirement plan.

5

Prohibited Transaction - this generally means the account is no longer an IRA.

6

Section 1035 exchange (a tax-free exchange of life insurance, annuity, qualified long-term care insurance, or endowment contracts).

7

Normal distribution

8

Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2018.

9

Cost of current life insurance protection.

A

May be eligible for 10-year tax option (See Form 4972).

B

Designated Roth account distribution.
NOTE: If code B is in box 7 and an amount is reporetd in box 10, see the instructions for Form 5329.

C

Reportable death benefits under section 6050Y.

D

Annuity payments from nonqualified annuities that may be subject to tax under section 1411.

EDistributions under Employee Plans Compliance Resolution System (EPCRS).
FCharitable gift annuity.
GDirect rollover of a distribution to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA.
HDirect rollover of a designated Roth account distribution to a Roth IRA.
JEarly distribution from a Roth IRA, no known exception (in most cases, under age 59½)
KDistribution of traditional IRA assets not having a readily available FMV (fair market value).
LLoans treated as distributions.**
MQualified plan loan offset.
NRecharacterized IRA contribution made for 2018 and recharacterized in 2018. 
PExcess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2017.
QQualified distribution from a Roth IRA.
RRechacterized IRA contribution made for 2017 and recharacterized in 2018.
SEarly distribution from a SIMPLE IRA in first 2 years, no known exception (under age 59½).
TRoth IRA distribution, exception applies.
UDividend distribution from ESOP under section 404(k). NOTE: This distribution isn't eligible for rollover.
WCharges or payment 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.

Within the program, if your loan is treated as a deemed distribution, please enter in box 7,  Code L plus Code 1 or Code B, whichever is applicable. To enter please:

  • Federal Section
  • Income (Enter Myself)
  • IRA/Pension 1099-R, 1099-RRB
  • Add or Edit Form 1099-R
  • In box 7 enter L1 or LB, whichever is applicable to your situation