1
Early distribution, no known exceptions
Participant has not reached age 59 1/2, and there are no known exceptions under Code 2, 3, or 4 apply. Code 1 is used if the distribution is made for medical expenses, health insurance premiums, qualified higher education expenses, a first-time home purchase, a qualified reservist distribution
2
Early distribution, exception applies
Participant
has not reached age 59 1/2, and the he distribution is for any of the following:
- A Roth IRA conversion (an IRA converted to a Roth IRA)
- A distribution made from a qualified retirement plan or IRA because of an IRS levy under section 6331
- A governmental section 457(b) plan distribution that is not subject to the additional 10% tax. But see Governmental section 457(b) plans, earlier, for information on distributions that may be subject to the 10% additional tax
- A distribution from a qualified retirement plan after separation from service in or after the year the participant has reached age 55
- A distribution from a governmental defined benefit plan to a public safety employee after separation from service, in or after the year the employee has reached age 50
- A distribution that is part of a series of substantially equal periodic payments.
- A distribution that is a permissible withdrawal under an eligible automatic contribution arrangement
- Any other distribution that is not required to be reported using Code 1, 3, or 4
3
Disability
No further details
4
Death
Regardless of the age of the participant to indicate payment to a decedent's beneficiary, including an estate or trust. Death benefit payments made by an employer but not made as part of a pension, profit-sharing, or retirement plan; payments of reportable death benefits
5
Prohibited transaction
Prohibited transaction involving the IRA account or the account is no longer an IR
6
Section 1035 exchange
Indicates the tax-free exchange of life insurance, annuity, long-term care insurance, or endowment contracts under section 1035.
7
Normal distribution
- Traditional IRA - section 401(k), or section 403(b) plan, if the taxpayer is at least age 59 1/2
- Roth IRA conversion if the participant is at least age 59 1/2
- Distribution from a life insurance, annuity, or endowment contract and for reporting income from a failed life insurance contract under section 7702(g)
- Code 7 is used if no other code applies
- Code 7 should not be used for Roth IRA
8
Excess contributions plus earnings/excess deferrals -and/or earnings taxable
See also Code P. This is for corrective distributions of excess deferrals, excess contributions, and excess aggregate contributions.
See Form 5329.
9
Cost of current life insurance
Premiums paid by a trustee or custodian for current life or other insurance protection
A
May be eligible for 10 year tax option
See
From 4972. For participants born before a certain date, or their beneficiaries to indicate the distribution may be eligible for the 10-year tax option method of computing the tax on lump-sum distributions (on Form 4972, Tax on Lump-Sum Distributions). To determine whether the distribution may be eligible for the tax option, consider if the recipient used this method (or capital gain treatment) in the past
B
Designated Roth account distribution
Use Code E for a section 415 distribution under EPCRS or Code H for a direct rollover to a Roth IRA
C
Reportable death benefits under section 6050Y
Distribution to report payments of reportable death benefits
D
Annuity payments from non-qualified annuities and distributions from life insurance contracts that may be subject to tax under section 1411
distribution from any plan or arrangement not described in section 401(a), 403(a) etc.
E
Distributions under Employee Plans Compliance Resolution System or EPCRS
No further details
F
Charitable gift annuity
If cash or capital gain property is donated in exchange for a charitable gift annuity, report distributions from the annuity on Form 1099-R. See charitable gift annuities for more details
G
Direct rollover and direct payment
Direct rollover from a qualified plan, a section 403(b) plan, or a governmental section 457(b) plan to an eligible retirement plan
H
Direct rollover of a designated Roth account distribution to a Roth IRA
Designated Roth account to a Roth IRA
J
Early distribution from a Roth IRA
Distribution from a Roth IRA when Code Q or Code T does not apply. Code 2 for an IRS levy and Code 5 for a prohibited transaction
K
Distribution of traditional IRA assets not having a readily available Fair Market Value or FMV
These assets may include:
- Stock, other ownership interest in a corporation, short- or long-term debt obligations, not readily tradable on an established securities market
- Ownership interest in a limited liability company (LLC), partnership, trust, or similar entity (unless the interest is traded on an established securities market)
- Real estate
- Option contracts or similar products not offered for trade on an established option exchange
- Other asset that does not have a readily available FMV
L
Loans treated as deemed distributions under section 72(p)
Not to be used to report plan loan offset
M
Qualified plan loan offset
Generally a type of plan loan offset due to severance from employment or termination of the plan
N
Re-characterized IRA contribution made for current calendar year
Contribution made for the calendar year and re characterized in the calendar year to another type of IRA by a trustee-to-trustee transfer or with the same trustee
P
Excess contributions plus earnings/excess deferrals taxable in tax year
See also code 8. Anyone using Code P for the refund of an IRA contribution under section 408(d)(4), including excess Roth IRA contributions, advise payees, at the time the distribution is made, that the earnings are taxable in the year in which the contributions were made
Q
Qualified distribution from a Roth IRA
Distribution from a Roth IRA if participant meets the 5-year holding period and the participant has reached age 59 1/2 or has died or is disabled
R
Re-characterized IRA contribution made for tax year
Contributions made for the tax year and re-characterized the following calendar year to another type of IRA by a trustee-to-trustee transfer or with the same trustee
S
Early distribution from a SIMPLE IRA in the first 2 years. No known exception
The taxpayer has not reached age 59 1/2, and none of the exceptions apply The 2-year period begins on the day contributions are first deposited in the individual's SIMPLE IRA.
T
Roth IRA distribution, exception applies
Not sure if the 5-year holding period has been met but, and the participant has reached age 59 1/2, or has died or is disabled. If any other code, such as 8 or P, applies, use Code J
U
Dividends distributed from an Employee Stock Ownership Plan or ESOP under section 404(k)
These are not eligible rollover distributions. Dividends paid by the corporation directly to plan participants or their beneficiaries should not be included here.
W
Charges or payments for purchasing
Long Term Care or LTC insurance contracts
LTC insurance contracts under combined arrangements which can be excluded under section 72(e)(11) against the cash value of an annuity contract or the cash surrender value of a life insurance contract