Everything you need to know about Form 1099-R

What is Form 1099-R?

Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., is the information return payers issue to report distributions from retirement and insurance-related accounts. It captures the gross distribution, the taxable portion, federal and state tax withheld, the type of distribution (early, normal, rollover, conversion, RMD, disability, death), and the underlying basis (for accounts that include after-tax money). The recipient uses 1099-R to report the distribution on Form 1040 and, where applicable, Form 5329 for any additional penalty taxes.

Who issues Form 1099-R and who gets one?

Plan administrators, IRA custodians, insurance companies, annuity issuers, and other payers issue Form 1099-R to anyone receiving a distribution of $10 or more from a retirement account, pension, annuity, or insurance contract during the year. Recipients include retirees taking RMDs, workers rolling over a 401(k) to an IRA, beneficiaries receiving inherited account distributions, taxpayers doing Roth conversions, and anyone who took an early withdrawal. Each distinct distribution event from a single payer typically appears on one 1099-R; multiple accounts produce multiple forms.

What the distribution codes in Box 7 mean?

Box 7 contains one or two distribution codes that tell the IRS how to treat the distribution. Common codes: 1 = early distribution, no known exception; 2 = early distribution, exception applies (such as disability, SEPP, age 55 separation from service, or first-time homebuyer); 3 = disability; 4 = death; 7 = normal distribution (age 59½ or older); G = direct rollover and rollover contribution; H = direct rollover of a designated Roth account distribution; B = designated Roth account distribution; Q = qualified Roth IRA distribution; T = Roth distribution, exception applies. The code drives whether the distribution is taxable, subject to the 10% penalty, or reportable on Form 5329.

When and how to file?

Payers furnish Copy B to recipients by January 31. Copy A is filed with the IRS by February 28 on paper or March 31 electronically. Filers issuing 10 or more information returns of any type must e-file. Recipients use Form 1099-R to complete Form 1040 lines for IRA distributions and pension/annuity income, and to determine whether Form 5329 is needed for any additional penalty tax. State copies appear in the lower boxes for state income tax reporting.