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.
Early distribution, no known exception (in most cases, under age 59½)
Early distribution, exception applies (under age 59½)
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.
Prohibited Transaction - this generally means the account is no longer an IRA
Section 1035 exchange (a tax-free exchange of life insurance, annuity, qualified long-term care insurance, or endowment contracts)
Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2018
Cost of current life insurance protection
May be eligible for 10-year tax option (See Form 4972)
Designated Roth account distribution. NOTE: If code B is in box 7 and an amount is reported in box 10, see the instructions for Form 5329
Reportable death benefits under section 6050Y
Annuity payments from nonqualified annuities that may be subject to tax under section 1411
Distributions under Employee Plans Compliance Resolution System (EPCRS)
Charitable gift annuity
Direct rollover of a distribution to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA
Direct rollover of a designated Roth account distribution to a Roth IRA
Early distribution from a Roth IRA, no known exception (in most cases, under age 59½)
Distribution of traditional IRA assets not having a readily available FMV (fair market value)
Loans treated as distributions**
Qualified plan loan offset
Recharacterized IRA contribution made for 2018 and recharacterized in 2018.
Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2017
Qualified distribution from a Roth IRA
Rechacterized IRA contribution made for 2017 and recharacterized in 2018
Early distribution from a SIMPLE IRA in first 2 years, no known exception (under age 59½)
Roth IRA distribution, exception applies
Dividend distribution from ESOP under section 404(k). NOTE: This distribution isn't eligible for rollover.
Charges 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 Distibutions Form 1099-R / RRB, SSA
* Add or Edit Form 1099-R
* In box 7 enter L1 or LB, whichever is applicable to your situation