What is a 1099-R?
A 1099-R is a tax form that reports money paid out of a pension, annuity, retirement plan, IRA, or insurance contract during the year. If a payer sent you $10 or more from one of those accounts, they file a 1099-R with the IRS and send you a copy. The form tells both of you how much came out (Box 1), how much of it is taxable (Box 2a), how much tax was already withheld (Box 4), and what kind of distribution it was (the Box 7 code). You use it to fill in the retirement-income lines of your Form 1040. One thing to get straight: a 1099-R does not mean you owe tax on the full amount. A rollover, a return of your own after-tax contributions, or a qualified Roth withdrawal can be fully or partly tax-free even though a 1099-R still gets filed. The Box 7 code is what settles it.
Who sends a 1099-R, and when?
The payer sends it. That is whoever held and paid out the money: a plan administrator, an IRA custodian, an annuity company, or an insurer. They must issue a 1099-R for any designated distribution of $10 or more.
Your copy is due by January 31 of the year after the distribution. The payer also files a copy with the IRS, so the IRS is matching your return against the same numbers you see. If your 1099-R is wrong, get a corrected one from the payer rather than "fixing" it yourself on your return.
What does each box on a 1099-R mean?
The form uses a two-column layout with several sub-lettered boxes (7a through 7d, 8a and 8b, 9a and 9b). Here are the ones that decide your tax.
| Box | Label | What it means |
|---|---|---|
| 1 | Gross distribution | The total paid out before any tax or other deductions were withheld. Includes direct rollovers. |
| 2a | Taxable amount | The part of Box 1 that is taxable. This is the number that usually flows to your 1040. |
| 2b | Not determined / Total distribution | "Not determined" means the payer could not compute the taxable amount, so you must. "Total distribution" means this payment closed out the account. |
| 3 | Capital gain (in Box 2a) | The portion of Box 2a that qualifies for capital-gain treatment (rare; pre-1974 lump sums). |
| 4 | Federal income tax withheld | Federal tax the payer already sent to the IRS on your behalf. A prepayment you claim on your return. |
| 5 | Employee / Roth contributions or insurance premiums | Your own after-tax money coming back tax-free. Not an "employee wages" figure. |
| 6 | NUA in employer's securities | Net unrealized appreciation on employer stock inside a lump-sum distribution. |
| 7a | Distribution code(s) | The code(s) that classify the payout. See the table below. |
| 7b | IRA/SEP/SIMPLE checkbox | Checked when the money came from an IRA, SEP, or SIMPLE rather than an employer plan. |
| 14-16 | State tax withheld / state distribution | The state side of the same distribution. |
Box 1 minus Box 2a is, roughly, the part that is not taxed. When Box 2a is blank and the "taxable amount not determined" box is checked, the payer is telling you to work out the taxable share yourself, usually because they do not know your cost basis.
What are the Box 7 distribution codes?
Box 7 is the centerpiece. One or two characters tell the IRS whether the money is a normal retirement payout, an early withdrawal that may trigger a 10% penalty, a rollover, a death benefit, or a correction. This is the full current list from the IRS Instructions for Forms 1099-R and 5498.
| Code | Meaning |
|---|---|
| 1 | Early distribution, no known exception (participant under 59½) |
| 2 | Early distribution, exception applies (under 59½, e.g. a Roth conversion or 72(t) payments) |
| 3 | Disability |
| 4 | Death (payment to a beneficiary or estate, any age) |
| 5 | Prohibited transaction (the account is no longer an IRA) |
| 6 | Section 1035 exchange (tax-free swap of life insurance, annuity, long-term care, or endowment contracts) |
| 7 | Normal distribution (participant at least 59½) |
| 8 | Excess contributions plus earnings / excess deferrals taxable in the current year |
| 9 | Cost of current life insurance protection |
| A | May be eligible for 10-year tax option (participant born before January 2, 1936) |
| B | Designated Roth account distribution |
| C | Reportable death benefits under section 6050Y |
| D | Annuity payments from nonqualified annuities possibly subject to the 3.8% tax under section 1411 |
| E | Distributions under Employee Plans Compliance Resolution System (EPCRS) |
| F | Charitable gift annuity |
| G | Direct rollover and direct payment (to another eligible retirement plan) |
| H | Direct rollover of a designated Roth account distribution to a Roth IRA |
| J | Early distribution from a Roth IRA, no known exception |
| K | Distribution of IRA assets with no readily available fair market value |
| L | Loans treated as deemed distributions under section 72(p) |
| M | Qualified plan loan offset |
| N | Recharacterized IRA contribution made and recharacterized in the same year |
| P | Excess contributions plus earnings / excess deferrals taxable in the prior year |
| Q | Qualified distribution from a Roth IRA (tax-free) |
| R | Recharacterized IRA contribution made for a prior year and recharacterized this year |
| S | Early distribution from a SIMPLE IRA in the first 2 years, no known exception |
| T | Roth IRA distribution, exception applies (5-year period possibly not met, but age 59½, death, or disability) |
| U | Dividends distributed from an ESOP under section 404(k) |
| W | Charges or payments for qualified long-term care insurance under combined arrangements |
| Y | Qualified charitable distribution (QCD) under section 408(d)(8) |
Source: IRS Instructions for Forms 1099-R and 5498 (2026 revision).
Codes can pair up. Code "1B" is an early distribution from a designated Roth account; "4G" is a direct rollover of a death benefit. The two codes people misread most: G means rollover, not income. A direct rollover moves money plan-to-plan and is not taxed, even though Box 1 shows the full amount. And code 1 is the penalty flag for a withdrawal before 59½ with no exception the payer knows about.
Do I owe tax on a 1099-R?
Usually the taxable amount in Box 2a is what you add to income, and the withholding in Box 4 is credited against your bill like a prepayment. But the answer really turns on Box 7:
- Code 7 (normal) or code 4 (death benefit): the Box 2a amount is generally taxable income, no penalty.
- Code 1 (early, no exception): taxable, plus a 10% additional tax on the taxable part unless you qualify for an exception you claim on Form 5329.
- Codes G or H (rollover): not taxable now, as long as the money actually landed in another retirement account.
- Code Q (qualified Roth): tax-free.
- Code B (designated Roth) or J/T (Roth IRA): taxability depends on the 5-year rule and your basis.
What if I did a rollover?
A rollover still generates a 1099-R. Box 1 shows the full amount, and Box 7 carries code G (direct, trustee-to-trustee) or, for a Roth-account-to-Roth-IRA move, code H. You report the gross amount on your 1040 and then show it as a nontaxable rollover, which zeroes out the tax. If you took the money yourself (an "indirect" rollover) and put it back into a retirement account within 60 days, the 1099-R may still show a taxable code, and you claim the rollover on your return. Keep the paper trail; the IRS is matching the form.
Sources
- What Form 1099-R reports, the $10 threshold, the January 31 recipient copy, box definitions, and the full Box 7 code list: IRS, Instructions for Forms 1099-R and 5498.
- Form layout and exact box labels (2026 revision): IRS Form 1099-R (PDF).
- The 10% additional tax on early distributions and its exceptions: IRS, About Form 5329.