How to Read and Report Your IRS Form 1099-R

Form 1099-R, “Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.,” is an informational document used in the U.S. tax system. Financial institutions and plan administrators that make distributions of $10 or more from these accounts are required to issue this form to both you and the IRS. The form’s purpose is to report the total distribution for the year, how much is taxable, and any income tax that was withheld. You should receive this form from your payer by January 31 of the year following the distribution.

Decoding Your Form 1099-R Box by Box

Understanding the data on Form 1099-R is the first step to reporting your income accurately. Each box contains specific information you will use when preparing your tax return.

Box 1, “Gross distribution,” shows the total amount paid to you from the account before any deductions. Box 2a, “Taxable amount,” indicates the portion of the gross distribution that is subject to income tax. For many traditional IRAs or 401(k)s, the amounts in Box 1 and Box 2a will be the same, but this is not always true.

If the payer cannot determine the taxable portion, Box 2b, “Taxable amount not determined,” will be checked, and you must calculate it yourself. This often requires using Form 8606, “Nondeductible IRAs.” Any taxes withheld at the time of the distribution appear in Box 4, “Federal income tax withheld,” and represent a credit toward any tax you may owe.

Box 5, “Employee contributions/Designated Roth contributions,” shows any after-tax money you contributed, which can be received back tax-free. Box 14 shows any state income tax withheld from the payment. The code in Box 7, “Distribution code(s),” explains the nature of your distribution and affects how it is taxed and whether penalties apply.

The codes in Box 7 explain why you received the money. If multiple codes apply, you may receive more than one Form 1099-R. Common codes include:

• Code 1: Early distribution, no known exception. This is for recipients under age 59 ½ and may be subject to a 10% additional tax on top of regular income tax.
• Code 2: Early distribution, exception applies. This applies to recipients under age 59 ½ who may qualify to waive the 10% penalty due to an exception, such as for disability or certain medical expenses.
• Code 4: Death. This indicates a distribution to a beneficiary.
• Code 7: Normal distribution. This is for a recipient who is at least 59 ½ years old and is subject to regular income tax but no penalty.
• Code G: Direct rollover. This is for funds sent directly to another retirement account and is generally not a taxable event.
• Code H: Direct rollover of a designated Roth account distribution to a Roth IRA.

Common Distribution Scenarios Explained

The information on Form 1099-R reflects specific financial events. Common scenarios like rollovers, conversions, and inherited accounts each have distinct reporting methods on the form.

A direct rollover occurs when funds are sent from one retirement account directly to another. This is reported with Code G in Box 7, and the taxable amount in Box 2a will be $0. In an indirect rollover, you receive a check and have 60 days to deposit the funds into another retirement account. The form for an indirect rollover will show the gross amount in Box 1 and use a code like 1 or 7, appearing taxable until you report the completed rollover on your tax return.

A Roth IRA conversion involves moving funds from a pre-tax traditional IRA to a post-tax Roth IRA. The converted amount is taxable income for that year. The form will show the gross distribution in Box 1, the same amount as taxable in Box 2a, and a distribution code of 2 or 7, depending on your age.

When a beneficiary takes a distribution from an inherited IRA, the Form 1099-R will include Distribution Code 4 in Box 7. The taxability of the distribution depends on whether the original account was a traditional or Roth IRA.

A Qualified Charitable Distribution (QCD) allows individuals age 70 ½ or older to donate up to $108,000 for 2025 from their IRA to a charity. A QCD is not taxable, but the Form 1099-R may report the full amount in Box 1 and Box 2a with a normal distribution code. You must report the transaction correctly on your tax return to exclude the QCD amount from your taxable income.

Reporting Form 1099-R Information on Your Tax Return

The information from Form 1099-R must be transferred to your annual income tax return, Form 1040. The specific lines can change, so always refer to the current year’s Form 1040 instructions for where to report the information.

The gross distribution from Box 1 is reported on line 5a of Form 1040, for pensions and annuities, and the taxable portion from Box 2a is entered on line 5b. For a non-taxable event like a rollover or a QCD, you report the full amount on line 5a and enter $0 or the correct taxable amount on line 5b.

The federal income tax withheld from Box 4 is reported on line 25b of Form 1040 and is added to your other tax payments. You must attach a copy of your Form 1099-R to your tax return if federal income tax was withheld.

If your Form 1099-R has a Code 1 in Box 7, you may need to file Form 5329, “Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts,” to calculate the 10% additional tax. You can also use Form 5329 to claim an exception to this tax, which corresponds with a Code 2 on your 1099-R.

How to Address an Incorrect Form 1099-R

If you discover an error on your Form 1099-R, you must take action to ensure you file an accurate tax return. An uncorrected error could lead to the IRS believing you have underreported income, so the correction process starts with the payer who issued the form.

The first step is to contact the payer, which is the financial institution or plan administrator listed on the form. Explain the information you believe is incorrect and provide documentation to support your claim. Request that they issue a corrected Form 1099-R, which will have the “CORRECTED” box checked at the top.

If you receive the corrected form before filing your taxes, use the new form for your return. If you have already filed, you must file an amended return using Form 1040-X, “Amended U.S. Individual Income Tax Return,” to report the corrected information.

If the payer is uncooperative or you have not received a corrected form by the end of February, you can call the IRS for assistance. The IRS may contact the payer for you and send you Form 4852, “Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R.” You can use this substitute form to report the correct information when you file, but you must attach a statement explaining the discrepancy.