What Is Form 1099-R: Distributions, Codes, and Taxes

Form 1099-R is the IRS form that reports money paid out of a retirement account, pension, annuity, or insurance contract during the prior year. Any distribution of $10 or more triggers one, and the payer must send you a copy by January 31.¹ The IRS receives its own copy, so what you report has to match. Receiving the form does not automatically mean you owe tax; the amount in Box 2a and the code in Box 7 decide that.

Who Sends You One

You will get a 1099-R from a 401(k), 403(b), or 457(b) plan, a traditional pension, a profit-sharing plan, any IRA (traditional, SEP, SIMPLE, or Roth), an annuity company, or an insurance carrier paying benefits under a contract, including disability payments under a life insurance policy.² Direct rollovers, returns of after-tax contributions, and qualified Roth distributions all generate the form without adding a dollar to your tax bill.

The Boxes That Decide Your Tax

The header of the form is administrative. The numbered boxes below it are where the tax math lives.

Box 1: Gross Distribution

Box 1 is the total paid out before any withholding.³ It can include amounts you rolled over, after-tax money you already paid tax on, and amounts that are entirely tax-free. Treat it as a starting point. It is rarely the number you report as taxable income.

Box 2a and Box 2b: Taxable Amount

Box 2a shows how much of Box 1 is taxable.³ For a traditional 401(k) or IRA funded entirely with pre-tax contributions, Box 2a usually matches Box 1. When after-tax contributions are involved, Box 2a is smaller because that portion comes back to you tax-free.

If the payer cannot determine the taxable portion, Box 2a is blank and the “Taxable amount not determined” checkbox in Box 2b is marked.⁴ The calculation then falls to you. For a traditional IRA that received a mix of deductible and nondeductible contributions, Form 8606 works out the taxable share. For pension annuity payments, Publication 575 covers the simplified method most retirees use.

Box 4: Federal Income Tax Withheld

Box 4 is the federal tax already taken out of the distribution.² It reduces your tax bill or increases your refund like any other withholding. One rule surprises people: if you take an eligible rollover distribution as a check payable to you rather than sending it directly to another retirement account, the plan must withhold 20% for federal taxes even if you plan to roll the money over within 60 days.⁵ To complete a full rollover, you have to make up that 20% out of pocket and reclaim it on your return.

Box 5: Employee Contributions or Roth Basis

Box 5 shows the piece of the distribution that represents after-tax employee contributions, designated Roth contributions, or insurance premiums you already paid tax on.⁶ This is the amount you recover tax-free. For a non-qualified distribution from a designated Roth account, Box 5 is your Roth contribution basis. For annuity payments, Box 5 helps establish the exclusion ratio applied to each payment over time.

Boxes 14 Through 17: State and Local

Box 14 reports state tax withheld, Box 15 identifies the state and payer’s state ID, Box 16 shows the amount subject to state tax, and Box 17 reports local tax withheld.⁷ These may be blank in states without income tax or without withholding on retirement distributions. Two sets of state and local fields let a payer report to two jurisdictions on one form.

Box 7 Distribution Codes

Box 7 carries a one- or two-character code that tells you and the IRS what kind of distribution this was, whether a penalty applies, and whether the money can be rolled over. A handful of codes cover most situations.

Code 7: Normal Distribution

Code 7 means you were at least 59½ when you took the money, or you reached the plan’s normal retirement age.⁸ No early withdrawal penalty. You owe ordinary income tax on whatever Box 2a shows.

Code 1: Early Distribution, No Known Exception

Code 1 means you took the money before 59½ and the payer has no reason to think an exception applies.⁹ The 10% additional tax applies on top of regular income tax on the Box 2a amount. If Code 1 is correct and the penalty is owed on the full amount, you can report the additional tax on Schedule 2 of Form 1040 without filing Form 5329. If you actually qualify for an exception the payer did not know about, such as a first-time home purchase or qualifying medical expenses, Form 5329 is how you claim it.¹⁰

Code 2: Early Distribution, Exception Applies

Code 2 also signals a pre-59½ distribution, but the payer knows an exception applies.¹¹ Common exceptions include total and permanent disability and a series of substantially equal periodic payments under 72(t).¹² No 10% penalty; the distribution is still ordinary income.

Code 4: Death Beneficiary

Code 4 appears when a beneficiary receives funds after the account owner’s death.¹³ The 10% penalty never applies regardless of the beneficiary’s age. The taxable amount is still subject to ordinary income tax unless the funds came from a Roth account meeting the five-year holding requirement.

Code G: Direct Rollover

Code G means the money moved directly between plans or IRAs without passing through your hands.¹⁴ No tax, no penalty, no mandatory 20% withholding. You still report it, but the taxable amount is zero.

Codes J, Q, and T for Roth IRAs

Code Q is a qualified Roth IRA distribution: the account has been open at least five years and you are at least 59½, disabled, or the distribution is going to a beneficiary after death. It is fully tax-free and penalty-free. Code T means the payer knows the age, disability, or death test is met but is unsure about the five-year holding period. Code J is an early Roth IRA distribution where no exception is known.¹⁵ With Code J, your original contributions still come out tax-free and penalty-free; earnings may be taxable and subject to the 10% penalty.

Code 8: Return of Excess Contributions

Code 8 appears when excess contributions or deferrals are returned along with any earnings on them.¹⁶ For excess 401(k) deferrals returned by the April 15 deadline following the contribution year, the excess itself is taxable in the year of deferral and the earnings are taxable in the year distributed.

Code L: Deemed Loan Distribution

If you borrowed from a 401(k) or 403(b) and the loan defaulted because you left the job, stopped paying, or exceeded the repayment period, the outstanding balance is treated as a taxable distribution.¹⁷ Code L reflects that even though no check went out. The 10% penalty can apply if you were under 59½, and a deemed loan distribution cannot be rolled over.

Putting the Numbers on Your Return

Box 1 and Box 2a go on separate lines of Form 1040 under either the IRA distributions section or the pensions and annuities section, depending on the source.³ Box 4 goes in the payments section and reduces what you owe.

The Box 7 code drives whether the 10% additional tax applies. If Code 1 is correct and you owe the penalty on the whole distribution, report it directly on Schedule 2. If you qualify for an exception the payer did not code, file Form 5329 with the correct exception number; that filing is what stops the IRS from assessing the penalty automatically.¹⁰

Situations the Form Doesn’t Label Clearly

Required Minimum Distributions

Starting at age 73, you generally must take annual withdrawals from traditional IRAs, SEP IRAs, SIMPLE IRAs, and most employer plans. The first RMD is due by April 1 of the year after you turn 73; each later one is due by December 31.¹⁸ Some employer plans let you defer RMDs while still working; that exception does not apply to IRAs.

There is no special code on the 1099-R that flags a distribution as an RMD. It usually appears with Code 7, and the RMD indicator lives on the companion Form 5498 the custodian files.¹⁹ Missing an RMD triggers an excise tax of 25% of the shortfall, reduced to 10% if you correct it within the timely correction window.²⁰

Qualified Charitable Distributions

If you are 70½ or older, you can direct up to $111,000 per year from a traditional IRA to a qualifying charity and leave that amount out of gross income entirely.²¹ A qualified charitable distribution counts toward your RMD. The 1099-R will not flag it; the form looks like any other IRA withdrawal. You report the full distribution on the IRA distributions line, enter the reduced taxable amount (often zero) on the taxable amount line, and write “QCD” next to it.²² Keep the written acknowledgment from the charity; the IRS has no other way to verify the transfer.

Roth Conversions and Indirect Rollovers

A Roth conversion generates a 1099-R with the full converted amount in Box 1, the taxable portion in Box 2a (usually with Box 2b checked), and Code 2 or Code 7 in Box 7 depending on your age.²³ The converted amount is ordinary income in the year of conversion; no 10% penalty applies to the conversion itself.

An indirect rollover, where the distribution check is made out to you and you redeposit it, must be completed within 60 days. Miss the window and the whole amount is taxable, plus the 10% penalty if you are under 59½. The mandatory 20% withholding still applies on the way out, so you have to bring outside cash to complete a full rollover. You are also limited to one indirect IRA-to-IRA rollover per 12-month period across all your IRAs combined; direct trustee-to-trustee transfers, Roth conversions, and rollovers between employer plans and IRAs do not count against that limit.²⁴ Violating the one-per-year rule makes the second rollover taxable and, if it lands in an IRA, an excess contribution subject to a 6% penalty for each year it remains.

If the Form Is Wrong or Never Arrives

If a number or code looks wrong, ask the plan administrator or financial institution for a corrected form. A corrected 1099-R has the “CORRECTED” box checked at the top. Do not file using numbers you know are wrong; wait for the correction or file an extension.

If nothing arrives, start with the payer. If you still have no form by the end of February, call the IRS at 800-829-1040 with the payer’s name, address, and phone number along with your own information. The IRS will contact the payer and send you Form 4852, a substitute for the missing 1099-R.²⁵ Use Form 4852 to estimate the distribution and attach it to your return.²⁶ If a real or corrected form later shows different numbers, amend on Form 1040-X.

Ignoring a 1099-R is the worst option. The IRS already has the data, and an unreported distribution can produce an accuracy-related penalty of 20% of the resulting underpayment, on top of the tax and interest.²⁷

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Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498
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Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
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Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025) – Section: Box 2a
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eCFR. 26 CFR 31.3405(c)-1 – Withholding on Eligible Rollover Distributions
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Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025) – Section: Box 5
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Internal Revenue Service. Form 1099-R (2025)
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code 7
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code 1
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Internal Revenue Service. Instructions for Form 5329
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code 2
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Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code 4
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code G
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code J
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code 8
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Code L
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Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
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Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025) – Section: Box 11
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Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans
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Internal Revenue Service. Notice 25-67 – 2026 Amounts Relating to Retirement Plans and IRAs
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Internal Revenue Service. Seniors Can Reduce Their Tax Burden by Donating to Charity Through Their IRA
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 – Section: Reporting Roth IRA Conversions
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Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions – Section: IRA One-Rollover-Per-Year Rule
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Internal Revenue Service. What to Do When a W-2 or Form 1099 Is Missing or Incorrect
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Internal Revenue Service. Form 4852 – Substitute for Form W-2 or Form 1099-R
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Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments