Form 1099-R

IRS Form 1099-R is a critical tax form used to report distributions from retirement accounts, pensions, annuities, profit-sharing plans, IRAs, and insurance contracts. These distributions may include rollovers, conversions to Roth accounts, or lump-sum payments. The form is issued by payers (such as financial institutions or employers) to recipients who have received taxable or non-taxable distributions during the year. It provides essential details about the gross distribution amount, taxable portion, federal income tax withheld, and other relevant information.

Form 1099-R is vital for taxpayers to accurately report income on their tax returns. It includes specific codes in Box 7 to identify the type of distribution (e.g., early withdrawal, normal distribution, rollover). Recipients use this information to determine their taxable income and comply with IRS regulations. The form also serves as a record for state and local tax reporting when applicable.

How to File Form 1099-R?

Form 1099-R can be filed electronically or on paper:

• Electronic Filing: If you have 10 or more forms to submit, e-filing is required through the IRS FIRE system.
• Paper Filing: For fewer than 10 forms, you can order scannable copies of Form 1099-R from the IRS website and mail them to the appropriate IRS processing center.

Filing Steps:

1. Complete all required fields on the form.
2. Provide copies to the recipient and file Copy A with the IRS.
3. Retain Copy C for your records.

Ensure accuracy when entering data to avoid penalties for incorrect filings.

How to Complete Form 1099-R?

Payer’s Information

• Enter the payer’s name, address, city/state/ZIP code, and telephone number.
• Include the payer’s Taxpayer Identification Number (TIN).

Recipient’s Information

• Enter the recipient’s name and address.
• Include the recipient’s TIN (only the last four digits may be shown for privacy).

Account Number

• Provide an account number if applicable. This helps identify specific accounts for corrections or amendments.

Box 1: Gross Distribution

• Report the total amount distributed during the year. This includes rollovers, conversions to Roth accounts, periodic payments, non-periodic payments, or total distributions.

Box 2a: Taxable Amount

• Enter the taxable portion of the distribution. If blank, it indicates that the payer couldn’t determine this amount (Box 2b will be checked).

Box 2b: Taxable Amount Not Determined

• Check this box if the payer couldn’t determine the taxable amount.
• Also check if this was a total distribution that closed out the account.

Box 3: Capital Gain

• Report any capital gain included in Box 2a from a lump-sum distribution or charitable gift annuity.

Box 4: Federal Income Tax Withheld

• Enter any federal income tax withheld from the distribution.

Box 5: Employee Contributions/Designated Roth Contributions

• Report after-tax contributions recovered tax-free this year or premiums paid on insurance contracts recovered tax-free.

Box 6: Net Unrealized Appreciation (NUA) in Employer’s Securities

• Report NUA attributable to employer securities included in a lump-sum distribution.

Box 7: Distribution Codes

Use appropriate codes to identify the type of distribution:

1. Early distribution (no known exception).
2. Early distribution (exception applies).
3. Disability.
4. Death.
5. Prohibited transaction.
6. Section 1035 exchange.
7. Normal distribution.
8. Excess contributions plus earnings taxable in current year.
   B. Designated Roth account distribution.

Refer to instructions for additional codes.

IRA/SEP/SIMPLE Checkbox

Check this box if it applies to traditional IRA, SEP IRA, or SIMPLE IRA distributions.

Box 8: Other Amounts

Report other amounts distributed that don’t fall under standard categories.

Box 9a: Percentage of Total Distribution

If a total distribution was shared among multiple recipients, enter your percentage here.

Box 9b: Total Employee Contributions

Enter employee contributions used to compute taxable amounts for life annuities from qualified plans or section 403(b) plans.

Box 10: Amount Allocable to IRR Within Five Years

Report amounts allocable under Internal Revenue Code rules within five years of receipt.

Box 11: First Year of Designated Roth Contributions

Enter the first year contributions were made to a designated Roth account reported on this form.

Box 12: FATCA Filing Requirement

Check if FATCA reporting applies under Internal Revenue Code chapter 4 requirements.

Box 13: Date of Payment

Enter the date of payment for reportable death benefits under section 6050Y.

Boxes 14–19: State and Local Tax Information

• Box 14: State tax withheld.
• Box 15: State/Payer’s state number.
• Box 16: State distribution amount.
• Box 17: Local tax withheld.
• Box 18: Name of locality.
• Box 19: Local distribution amount.

These boxes are used for state/local tax reporting when applicable.

Additional Notes

Form copies:

• Copy A is filed with the IRS.
• Copy B is provided to recipients for federal tax filing.
• Copy C is retained by payers for records.
  For state/local filing requirements, use Copy D or Copy E as needed.