1099 Login
The distribution code in Box 7a of Form 1099-R tells the IRS what kind of payment it was: an early or normal distribution, a rollover, a death benefit or something else. The code signals whether the 10% additional tax on early distributions may apply and how the recipient reports the money.
Starting with tax year 2026, the distribution code goes in Box 7a instead of Box 7. The box can hold two codes when the IRS allows the combination, such as 7B or 4G. The codes and combinations below follow the 2026 IRS Instructions for Forms 1099-R and 5498. For the other 2026 changes, including new Boxes 7b to 7d and Code Y, see Form 1099-R Changes for Tax Year 2026.
Numeric codes
| Code | What it means | Can combine with |
| 1 | Code 1 means an early distribution with no known exception, usually before age 59½, so the 10% additional tax may apply. | 8, B, D, K, L, M, P |
| 2 | Code 2 means an early distribution where the payer knows an exception applies, so the 10% additional tax doesn’t apply. | 8, B, D, K, L, M, P |
| 3 | Code 3 means a disability distribution, which isn’t subject to the 10% additional tax. | D |
| 4 | Code 4 means a death distribution paid to a beneficiary or estate, with no 10% additional tax at any age. | 8, A, B, D, G, H, K, L, M, P, Y |
| 5 | Code 5 means a prohibited transaction, which ends the account’s status as an IRA. | None |
| 6 | Code 6 means a section 1035 exchange of one insurance or annuity contract for another. | W |
| 7 | Code 7 means a normal distribution, usually at age 59½ or older, with no 10% additional tax. | A, B, D, K, L, M, Y |
| 8 | Code 8 means excess contributions or deferrals returned with earnings, taxable in the current year. | 1, 2, 4, B, J, K |
| 9 | Code 9 means the cost of current life insurance protection under a retirement plan. | None |
Letter codes
| Code | What it means | Can combine with |
| A | Code A means the distribution may qualify for the 10-year tax option. | 4, 7 |
| B | Code B means the money came from a designated Roth account, such as a Roth 401(k), 403(b) or governmental 457(b). | 1, 2, 4, 7, 8, G, L, M, P, U |
| C | Code C means reportable death benefits under section 6050Y. | D |
| D | Code D means annuity payments from a nonqualified annuity that may be subject to the net investment income tax. | 1, 2, 3, 4, 7, C |
| E | Code E means a corrective distribution under the IRS’s Employee Plans Compliance Resolution System (EPCRS). | None |
| F | Code F means a payment from a charitable gift annuity. | None |
| G | Code G means a direct rollover to another plan or IRA, which is usually not taxable. | 4, B, K |
| H | Code H means a direct rollover from a designated Roth account to a Roth IRA, which isn’t taxable. | 4 |
| J | Code J means an early distribution from a Roth IRA, which may be partly taxable on earnings. | 8, P |
| K | Code K means traditional IRA assets that don’t have a readily available fair market value. | 1, 2, 4, 7, 8, G, Y |
| L | Code L means a plan loan treated as a deemed distribution, such as a loan in default. | 1, 2, 4, 7, B |
| M | Code M means a qualified plan loan offset, usually when someone leaves the job with a loan outstanding. | 1, 2, 4, 7, B |
| N | Code N means an IRA contribution recharacterized in the same year it was made. | None |
| P | Code P means excess contributions returned with earnings that are taxable in the prior year. | 1, 2, 4, B, J |
| Q | Code Q means a qualified, tax-free distribution from a Roth IRA. | None |
| R | Code R means an IRA contribution recharacterized for the prior year. | None |
| S | Code S means an early SIMPLE IRA distribution in the first two years, where a 25% additional tax may apply. | None |
| T | Code T means a Roth IRA distribution where the owner is 59½ or older, disabled or deceased, but the payer doesn’t know if the five-year rule is met. | None |
| U | Code U means a dividend paid from an ESOP under section 404(k). | B |
| W | Code W means charges for qualified long-term care insurance under a combined arrangement. | 6 |
| Y | Code Y means a qualified charitable distribution from an IRA; it’s optional for tax year 2026. | 4, 7, K |
Filing 1099-Rs for a plan or benefit fund? Send TAB1099 the file your system already produces. We validate the data and file it through IRIS under our own TCC. See how TAB1099 works or call 312-527-4306.
The most common codes, explained
What does code 1 mean on Form 1099-R?
Code 1 means an early distribution with no known exception, usually paid to someone under age 59½. The 10% additional tax may apply on top of regular income tax.
Code 1 doesn’t mean the recipient definitely owes the 10% tax. It means the payer didn’t know of an exception. The IRS tells payers to use Code 1 even when the money was used for medical expenses, health insurance premiums, higher education expenses, a first-time home purchase or a qualified reservist distribution. The recipient claims those exceptions on Form 5329.
Payers also use Code 1 when they don’t know whether the substantially equal periodic payments exception applies. Common combinations are 1B (designated Roth account), 1L (loan treated as a distribution) and 1M (plan loan offset). Early SIMPLE IRA distributions in the first two years use Code S instead, and early Roth IRA distributions use Code J.
What does code 2 mean on Form 1099-R?
Code 2 means an early distribution where the payer knows an exception applies. The recipient is usually under 59½, but the 10% additional tax doesn’t apply. Regular income tax still applies to the taxable amount in Box 2a.
Common cases include:
- Distributions from a qualified plan after the participant left the job in or after the year they turned 55 (this doesn’t apply to IRAs)
- Substantially equal periodic payments
- Distributions made because of an IRS levy
- Roth IRA conversions for someone under 59½
- Permissible withdrawals from an eligible automatic contribution arrangement
- Governmental 457(b) distributions that didn’t come from a rollover
Common combinations are 2B, 2L and 2M.
What does code 4 mean on Form 1099-R?
Code 4 means a death distribution: money paid to a beneficiary or estate after the account owner or plan participant died. The 10% additional tax never applies, at any age. Pre-tax money is still subject to income tax; inherited Roth money is often tax-free.
Payers issue the form in the beneficiary’s name and taxpayer ID, with a separate Form 1099-R for each beneficiary. Payments made to the participant before death go on a separate form in the participant’s name.
Common combinations are 4G (direct rollover by a beneficiary), 4B (designated Roth account), 4H (designated Roth rolled directly to a Roth IRA), 4A (10-year tax option) and Y4 (qualified charitable distribution from an inherited IRA, if using Code Y).
What does code 7 mean on Form 1099-R?
Code 7 means a normal distribution, usually paid to someone age 59½ or older. The 10% additional tax doesn’t apply, but the taxable amount in Box 2a is still subject to regular income tax.
Payers use Code 7 for:
- Distributions from a plan or traditional IRA to someone 59½ or older, including required minimum distributions
- Roth IRA conversions for someone 59½ or older (with Box 7b checked)
- Military retirement pay and survivor benefit annuities, with no second code
Common combinations are 7B (designated Roth account), 7A (10-year tax option), 7L and 7M (plan loans) and Y7 (qualified charitable distribution, if using Code Y). Roth IRA distributions don’t use Code 7; they use Q, T or J.
What does code G mean on Form 1099-R?
Code G means a direct rollover: the money moved straight from a retirement plan to another plan or an IRA without being paid to the recipient. Whether it’s taxable depends on where it went.
| Rolled into | Taxable? | Box 2a shows |
| Traditional IRA or another pre-tax plan | No | -0- |
| Roth IRA, from a pre-tax plan | Yes, the pre-tax amount | The taxable amount |
| Designated Roth account in the same plan (in-plan Roth rollover) | Yes, the pre-tax amount | The taxable amount |
Don’t use Code G for an indirect rollover, where the check was paid to the participant and they redeposited it within 60 days. Trustee-to-trustee transfers between IRAs aren’t reported on Form 1099-R at all, and designated Roth money rolled directly to a Roth IRA uses Code H.
What does code J mean on Form 1099-R?
Code J means an early distribution from a Roth IRA with no known exception, usually paid to someone under 59½. It doesn’t automatically mean tax is owed. Roth IRA withdrawals come out in order: regular contributions first, then conversions, then earnings. Only earnings are subject to income tax, and the 10% additional tax can apply to earnings and to conversions less than five years old.
The IRS tells payers to leave Box 2a blank for most Roth IRA distributions, because they usually don’t know the owner’s contribution history. The recipient works out the taxable part on Form 8606.
| Code | When it’s used |
| Q | Qualified distribution: the Roth IRA has met the five-year rule and the owner is 59½ or older, disabled or deceased. Tax-free. |
| T | The owner is 59½ or older, disabled or deceased, but the payer doesn’t know whether the five-year rule is met. |
| J | Early distribution with no known exception. |
How to choose the right code
- Check the recipient’s age. Under 59½ usually means Code 1 or 2. Age 59½ or older usually means Code 7.
- Check for death or disability. Payments to a beneficiary or estate use Code 4 at any age. Disability uses Code 3, but only when the plan has a basis for the determination.
- Check how the money moved. A direct rollover to another plan or IRA uses Code G (4G for a beneficiary).
- Check the account type. Designated Roth 401(k) and 403(b) distributions add B (for example, 7B). Roth IRA distributions use J, Q or T.
- Use separate forms for different distribution types in the same year, such as a pension payment and a return of excess contributions.
Examples
| Situation | Code |
| Age 45, 401(k) withdrawal the participant says is for medical expenses | 1 (participant claims the exception) |
| Age 56, left the employer at 55, takes a 401(k) distribution | 2 |
| Age 52, 401(k) moved directly to an IRA | G |
| Beneficiary of a deceased participant’s Roth 401(k) | 4B |
| Age 75, QCD from a traditional IRA (if using Code Y) | Y7 |
| Age 72 beneficiary, QCD from an inherited IRA (if using Code Y) | Y4 |
| Age 35, SIMPLE IRA withdrawal 14 months after first contribution | S |
Correcting a wrong code
A wrong code can mean the recipient is taxed or penalized incorrectly, and it can trigger IRS notices. File a corrected Form 1099-R with the IRS and send the recipient a corrected copy.
For returns due in 2027, penalties range from $60 to $340 per form, depending on how quickly you correct them. Intentional disregard carries a penalty of at least $690 per form. From November 19, 2026, corrections go through IRIS; see After You E-File Through IRIS.
For benefit fund administrators
Disability retirements cause the most coding questions. Code 3 requires a determination that the participant can’t engage in substantial gainful activity, so document the basis for every Code 3 and Code 2. For survivor and beneficiary payments, confirm each beneficiary’s taxpayer ID before forms are produced; see TIN matching best practices. At volume, validate code combinations before the file goes out. See Benefit Fund Administration.
Related reading
- Form 1099-R Changes for Tax Year 2026
- 2027 Tax Form Deadlines: 1099 & W-2 Information Returns
- IRS FIRE System Retirement 2026: Understanding the Transition to IRIS
TAB1099 handles 1099-Rs from start to finish. We file through IRIS under our own TCC, print and mail recipient copies and handle corrections. Call 312-527-4306 or request a quote.
This article is general information, not tax advice. Payers are responsible for choosing the correct distribution code; consult your plan’s tax advisor for specific situations.
