What Is Form 1099-R for Retirement Distributions?

If you received a distribution of $10 or more from a retirement plan, pension, or annuity, the financial institution or payer will send you Form 1099-R. The form’s purpose is to report the details of your distribution to both you and the Internal Revenue Service (IRS). The information is needed to prepare your income tax return, as it details the total amount you received and how much of it is taxable. Understanding this form is part of managing your tax obligations, and payers are required to send it to you by January 31 of the year following the distribution.

Understanding the Key Information on Your Form 1099-R

Several boxes on Form 1099-R contain the financial details of your distribution. Box 1, “Gross distribution,” shows the total amount of money you received from the retirement account before any taxes were withheld. This figure represents the entire sum paid out to you and is the starting point for determining your tax liability.

The taxable portion of your distribution is found in Box 2a, “Taxable amount,” which is the amount you must report as income. This box may be blank, which signifies that the payer could not determine the taxable portion. In this case, the responsibility for calculating the taxable amount falls to you.

Box 2b has two checkboxes to provide more detail. If the “Taxable amount not determined” box is checked, it confirms you must figure out the taxable amount yourself. If the “Total distribution” box is checked, it indicates that the entire account balance was paid out.

Box 4, “Federal income tax withheld,” shows any federal income tax already paid, which reduces the total tax you may owe. Box 14 shows any state income tax withheld. Box 5, “Employee contributions/Designated Roth contributions,” shows any after-tax money you contributed, which is not taxed upon withdrawal. Box 7 contains distribution codes that specify the nature of the withdrawal.

Decoding Box 7 Distribution Codes

Box 7 of Form 1099-R provides information about the type of distribution you received, communicated through a series of codes. These codes help determine if you owe an additional tax on the distribution or if you qualify for an exception. If more than two codes apply, you may receive a second Form 1099-R.

• A normal distribution for a taxpayer who is at least 59½ years old. This is the standard code for regular withdrawals and carries no penalties.
• An early distribution where no known exception to the 10% additional tax applies. You will likely need to pay this additional tax.
• An early distribution where an exception to the 10% tax applies, such as for a disability or certain medical expenses.
• A distribution to a beneficiary after the account holder’s death, which is considered a death benefit.
• A direct rollover to another retirement account. This is not a taxable event but must still be reported.
• A direct rollover from a designated Roth account to a Roth IRA.
• A distribution of excess contributions plus any earnings, which has specific tax consequences.

Reporting 1099-R Information on Your Tax Return

When reporting the information on your Form 1040, the lines you use depend on the account type. For distributions from IRAs, you will report the gross amount from Box 1 on Line 4a of your Form 1040 and the taxable amount from Box 2a on Line 4b. For distributions from pensions or annuities, the gross amount is reported on Line 5a, and the taxable amount goes on Line 5b.

Any federal income tax that was withheld, as indicated in Box 4, should be reported on Line 25d of your Form 1040. This ensures you get credit for the taxes you have already paid. If you have state tax withholding shown in Box 14, you will report that on your state tax return.

In certain situations, you may need to file an additional form. If you took an early distribution and owe a penalty, indicated by Code 1 in Box 7, you must complete and attach Form 5329, Additional Taxes on Qualified Plans. This form is used to calculate the additional tax you owe.

Handling Incorrect or Missing Forms

If you find an error on your Form 1099-R, your first step is to contact the payer listed on the form. You should request a corrected Form 1099-R, which will be marked “Corrected.” If you have not received your form by the deadline, check your online account with the financial institution, as many make these documents available electronically. If it is not there, contact the payer to have a copy sent to you.

Should you be unable to obtain the form from the payer, you can use Form 4852, a substitute for Form 1099-R. You will need to estimate your distributions and any taxes withheld as accurately as possible. If you later receive the correct Form 1099-R and the information differs from your estimate, you must file an amended tax return using Form 1040-X.