In the United States, Form 1099-R is a variant of Form 1099 used for reporting on distributions from pensions, annuities, retirement or profit sharing plans, IRAs, charitable gift annuities and Insurance Contracts. Form 1099-R is filed for each person who has received a distribution of $10 or more from any of the above.
Some of the items included on the form are the gross distribution, the amount of the distribution that is taxable, the amount withheld for tax purposes, and a code that represents the type of distribution made to plan holder.
Form 1099-R must be mailed to the recipients by January 31 and to the IRS by the last day of February.:6 If the custodian files with the IRS electronically, the form is due by March 31. The plan owner, the IRS and the municipal or state tax department (if applicable) all receive a copy of the form. These copies are used to cross-reference individual tax returns to ensure compliance. Any person who receives an erroneous 1099-R form should immediately contact the plan custodian who sent it in order to rectify the situation and avoid filing an incorrect tax return.
If no after-tax contributions were made to the pension plan before distribution, such as if the plan is a traditional IRA, the entire distribution is generally included as taxable income. However, in cases where after-tax contributions were made to an annuity or pension, only a portion of the distribution may be taxed.
Box 2 contains the amount of the distribution that is taxable. The taxable amount will be zero if the entire distribution is any of the following:
- A direct rollover (other than an IRR) from a qualified plan, a section 403(b) plan, or a governmental section 457(b) plan to another such plan or to a traditional IRA;
- A direct rollover from a designated Roth account, such as a Roth 401(k), to a Roth IRA;
- A traditional, SEP, or SIMPLE IRA directly transferred to an accepting employer plan;
- An IRA recharacterization;
- A nontaxable section 1035 exchange of life insurance, annuity, endowment or long-term care insurance contracts;
- A nontaxable charge or payment, for the purchase of a qualified long-term care insurance contract, against the cash value of an annuity contract or the cash surrender value of a life insurance contract.
|1||Early distribution, no known exception (in most cases, under age 59 ½)|
|2||Early distribution, exception applies (under age 59 ½)|
|4||Death – regardless of the age of the employee/taxpayer to indicate to a decedent’s beneficiary, including an estate or trust. Also used for death benefit payments made by an employer but not made as part of a pension, profit-sharing, or retirement plan.|
|5||Prohibited Transaction – This generally means 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)|
|8||Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2015|
|9||Cost of current life insurance protection|
|A||May be eligible for 10-year tax option|
|B||Designated Roth account distribution|
|D||Annuity payments from nonqualified annuities that may be subject to taxation under section 1411|
|E||Distributions under Employee Plan Compliance Resolution System (EPCRS)|
|F||Charitable gift annuity|
|G||Direct rollover of a distribution (other than a designated Roth account distribution) to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA|
|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 ½)|
|L||Loans treated as distributions|
|N||Recharacterized IRA contribution made for 2015 and recharacterized in 2015|
|P||Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2014|
|Q||Qualified distribution from a Roth IRA where the participant meets the 5 year holding period and has reached age 59 ½, has died, or is disabled|
|R||Recharacterized IRA contribution made for 2014 and recharacterized in 2015.|
|S||Early distribution from a SIMPLE IRA in first 2 years, no known exception (under age 59 ½)|
|T||Roth IRA distribution, exception applies|
|U||Dividend distribution from ESOP under sec. 404(k)|
|W||Charges or payments for purchasing qualified long-term care insurance contracts under combined arrangements.|
Relation to other forms
Form 1099-R reports the gross distribution from the custodian and how much of that amount is taxable. The plan owner uses this information to fill out lines 15 and 16 on Form 1040. Copy B of Form 1099-R is attached to Form 1040 only if federal income tax is withheld in box 4 of Form 1099-R.
With regards to IRAs, Form 1099-R is used for reporting distributions from an IRA while Form 5498 is used for reporting contributions to an IRA. Income earned (such as interest and dividends) through an IRA is not reported on either Form 1099-R or Form 5498.
Form W-4P "Withholding Certificate for Pension or Annuity Payments" is filed by payment recipients to inform payers the correct amount of tax to withhold from their payments. This amount is reported on Form 1099-R.
- "Instructions for Forms 1099-R and 5498" (PDF). Internal Revenue Service. Retrieved 2016-08-28.
- "Form 1099-R". Investopedia. 2005-01-27. Retrieved 2016-08-28.
- "2015 General Instructions for Certain Information Returns" (PDF). Internal Revenue Service. Archived from the original (PDF) on March 15, 2015. Retrieved October 4, 2016.
- "What Is IRS Form 5498?". turbotax.intuit.com. Retrieved 2016-08-28.
- "When to Use Tax Form 1099-R: Distributions From Pensions, Annuities, Retirement, etc". turbotax.intuit.com. Retrieved 2016-08-29.
- "On my 1099-R, what do the codes in box 7 mean?". taxslayer.com. Retrieved 2016-08-29.
- "Form 1040 (2014)" (PDF). Internal Revenue Service. Retrieved 2016-08-28.
- "General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G)" (PDF). Internal Revenue Service. Retrieved 2016-08-28.
- "RRB-1099: Railroad Benefits: Where do I report form RRB-1099 or RRB-1099-R?". www.taxslayer.com. Retrieved 2016-09-04.
- "Form W-4P, Withholding Certificate for Pension or Annuity Payments". Internal Revenue Service. Retrieved 2016-08-28.
- "W-4P Withholding Certificate for Pension or Annuity Payments" (PDF). Internal Revenue Service. Retrieved 2016-08-28.