1099-R Distribution Codes Explained (Box 7 Codes List)
Form 1099-R reports money paid out of pensions, annuities, retirement plans, IRAs and some insurance contracts. Most of the form is straightforward: how much was paid, how much is taxable and how much tax was withheld. The part that confuses people is box 7, the distribution code. That short code tells the IRS what kind of payout it was, and it can decide whether an extra tax applies.
Where the code goes
Box 7 holds one or two characters. Next to it is a checkbox marked IRA/SEP/SIMPLE, which is ticked when the money came from one of those accounts. Some combinations of two codes are allowed, for example 7 and B together.
The most common codes
| Code | What it means |
|---|---|
| 1 | Early distribution, no known exception. The person is usually under age 59½, and a 10% additional tax may apply. |
| 2 | Early distribution, exception applies. Under 59½, but an exception (such as separation from service in or after the year you turn 55) means the 10% additional tax does not apply. |
| 3 | Disability. |
| 4 | Death. Paid to a beneficiary or estate. |
| 7 | Normal distribution. Usually age 59½ or older. |
| 8 | Excess contributions plus earnings, taxable in the current year. |
| B | Distribution from a designated Roth account in an employer plan, such as a Roth 401(k). |
| G | Direct rollover to another qualified plan or a traditional IRA. Usually not taxable. |
| H | Direct rollover of a designated Roth account to a Roth IRA. |
| J | Early distribution from a Roth IRA. |
| L | Loan treated as a distribution, for example an unpaid 401(k) loan. |
| Q | Qualified distribution from a Roth IRA. Generally tax-free. |
| T | Roth IRA distribution, exception applies. |
There are other codes for less common situations, such as corrective distributions and annuity payments. The IRS instructions for Forms 1099-R and 5498 list them all.
Why the code matters
- Taxes: a code G rollover is usually not taxable, while a code 7 distribution normally is.
- The 10% additional tax: code 1 tells the IRS that the 10% additional tax on early distributions may apply, unless you claim an exception on Form 5329.
- Roth accounts: codes Q, T, J, B and H help separate tax-free Roth withdrawals from taxable ones.
If you think the code on your form is wrong, contact the payer and ask for a corrected 1099-R before you file.
Other boxes worth checking
- Box 1, gross distribution: the total paid out.
- Box 2a, taxable amount: the part that is taxable, if the payer knows it. If box 2b "taxable amount not determined" is ticked, you work it out yourself.
- Box 4, federal income tax withheld: carried to your tax return as a payment.
- Boxes 14–19: state and local tax withheld and distributions.
When 1099-R forms are due
Payers generally send Copy B to the recipient by January 31, and file with the IRS by February 28 on paper or March 31 electronically. A 1099-R is usually required for distributions of $10 or more.
Fill in a 1099-R for free
Our free 1099-R form generator lays out every box, including the box 7 code and the IRA/SEP/SIMPLE checkbox, so you can check a form before you file the official version. We also have free 1099-INT and 1099-DIV generators.
This article is general information, not tax advice. Always check the current IRS instructions or ask a tax professional about your situation.