Are you filing a Form 1099-R for your client? Find the explanation for box 7 codes here.
Current 1099-R Box 7 Distribution Codes:
| 1 | (1) Early distribution, no known exception (in most cases, under age 59-1/2). (See Form 5329) For a rollover to a traditional IRA of the entire taxable part of the distribution, do not file Form 5329. See the instructions for Form 1040; (2) Distribution for medical expenses, health insurance premiums, qualified higher education expenses, a first-time home purchase, a qualified reservist distribution, or a qualified birth or adoption distribution under section 72(t)(2)(B), (D), (E), (F), (G), or (H); (3) taxpayer who is 59-1/2 or older and who modifies a series of substantially equal periodic payments under section 72(q), (t), or (v) prior to the end of the 5-year period which began with the first payment. |
| 2 | Early distribution, exception applies (under age 59-1/2). |
| 3 | Disability per section 72(m)(7). |
| 4 | Death. |
| 5 | Prohibited transaction involving an IRA account, i.e., 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 the prior year. |
| 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 an amount is also reported in box 10, see the Instructions for Form 5329 and Publication 575.) |
| C | Reportable death benefits under section 6050Y. |
| D | Annuity payments from nonqualified annuities and distributions from life insurance contracts that may be subject to tax under section 1411 (a distribution from any plan or arrangement not described in section 401(a), 403(a), 403(b), 408, 408A, or 457(b)). |
| E | Distributions under Employee Plans Compliance Resolution System (EPCRS). |
| F | Charitable gift annuity. |
| G | (1) Direct rollover of a distribution from and to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA; (2) a direct payment from an IRA to an accepting employer plan; (3) An In-Plan Roth Rollover (IRR) that is a direct rollover. |
| 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), assuming codes Q or T do not apply. |
| K | Distribution of traditional IRA assets not having a readily available FMV. |
| L | Loans treated as deemed distributions under section 72(p). |
| M | Qualified plan loan offset. |
| N | Recharacterized IRA contribution made for the current year and recharacterized in the current year. |
| P | Excess contributions plus earnings/excess deferrals taxable in the prior year. |
| Q | Qualified distribution from a Roth IRA. |
| R | Recharacterized IRA contribution made for the prior year and recharacterized in the current year. |
| S | Early distribution from a SIMPLE IRA in the first 2 years, no known exception (in most cases, under age 59-1/2). |
| T | Roth IRA distribution, exception applies. |
| U | Dividend distributed from ESOP under section 404(k). |
| W | Charges or payments for purchasing qualified long-term care insurance contracts under combined arrangements. |
Additional information
Instructions for Forms 1099-R and 5498
Publication 575: Pension & Annuity Income
IRC Section 72, Annuities; certain proceeds of endowment and life insurance contracts
