true
  • Meet Claudell, one of our tax experts.
    TurboTax Live Assisted Basic
    File 100% FREE with expert help: Get live help from tax experts, plus a final review before you file — all free.
    Simple tax returns only.
    See if you qualify. Must file by 3/31.
Top
  1. TurboTax /
  2. Tax Calculators & Tips /
  3. Tax Tips Guides & Videos /
  4. IRS Tax Forms /
  5. When to Use Tax Form 1099-R: Distributions From Pensions, Annuities, Retirement, etc.

When to Use Tax Form 1099-R: Distributions From Pensions, Annuities, Retirement, etc.

Updated for Tax Year 2022 • December 1, 2022 09:15 AM


OVERVIEW

Form 1099-R is used to report the distribution of retirement benefits such as pensions and annuities. You should receive a copy of Form 1099-R, or some variation, if you received a distribution of $10 or more from your retirement plan.


File 100% FREE with expert help

Get live help from tax experts plus a final review with Live Assisted Basic.

For simple tax returns only.
See if you qualify.
Limited time offer. Must file by 3/31.

$89$0*
State included

For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.


 

when to use tax form 1099r

Form 1099-R

Form 1099-R is used to report the distribution of retirement benefits such as pensions, annuities or other retirement plans. Additional variations of Form 1099-R include:

  • Form CSA 1099R,
  • Form CSF 1099R and
  • Form RRB-1099-R.

Most public and private pension plans that are not part of the Civil Service system use the standard Form 1099-R. You should receive a copy of Form 1099-R, or some variation, if you received a distribution of $10 or more from your retirement plan.

Pension and annuity payments

Employer based retirement benefits are basically an extension of compensation arranged by the employer and employee. Income taxes on most retirement plan contributions are deferred, meaning that income tax is not paid on contributed funds until they are withdrawn by the taxpayer.

Pension and annuity distributions are usually made to retired employees, disabled employees and in some cases to the beneficiary of a deceased employee.

  • If no after-tax contributions were made to the pension plan before distribution, the entire amount is generally included in taxable income.
  • However, in cases where after-tax contributions were made to an annuity or pension, only a portion of the distribution will usually be taxed.

Rollovers

A direct transfer moves retirement funds from one custodian to another, typically without paying taxes on the money transferred.

  • Direct transfers are typically identified on Form 1099-R by using either the G or H distribution codes in box 7.
  • Indirect rollovers occur when the owner of the account takes possession of the retirement funds and re-deposits them into another qualified retirement account.

In order to avoid the funds being taxed as income and possible early distribution penalties, typically the funds must be rolled over into a qualified account within 60 days of distribution. Generally, you are only allowed to do one indirect rollover in a 12-month period regardless of how many IRA-type accounts that you have.

Funds distributed directly to the taxpayer are generally subject to a 20% federal income tax withholding. This means that the taxpayer must contribute additional funds in order to make up for the 20% that was withheld and sent to the IRS so that the rollover amount is equal to the total distribution. When a rollover meets all of the Internal Revenue Service guidelines, the distribution is not taxed; however, the amount still must be reported on your tax return and shown as a rollover.

Loans

Some companies allow employees the option of taking loans against pension plans. In most cases, these loans are repaid with interest and are not considered to be distributions. Form 1099-R is issued when a taxpayer does not make the required loan payments on time.

  • When this occurs, the amount not repaid is considered a distribution and is usually reported on Form 1099-R with the distribution code L.
  • These distributions are deemed taxable income, and may be subject to early distribution penalties.

Early distributions

Most benefits that are paid before the taxpayer has reached the age of 59 1/2 are considered to be early distributions. An additional 10% federal tax is imposed on early distributions to discourage the misuse of retirement funds. Additionally, some states also impose a state penalty on these early distributions.

The additional tax applies to the entire taxable amount of the distribution, unless an exception applies.  Some common exceptions include:

An exception is also met if the payments are made to an alternate payee under a qualified domestic relations (divorce) order.

Let an expert do your taxes for you, start to finish with TurboTax Live Full Service. Or you can get your taxes done right, with experts by your side with TurboTax Live Assisted. File your own taxes with confidence using TurboTax. Just answer simple questions, and we’ll guide you through filing your taxes with confidence. Whichever way you choose, get your maximum refund guaranteed.

File 100% FREE with expert help

Get live help from tax experts plus a final review with Live Assisted Basic.

For simple tax returns only.
See if you qualify.
Limited time offer. Must file by 3/31.

$89$0*
State included

Get your max refund

Answer simple questions about your life and TurboTax Free Edition will take care of the rest.

For simple tax returns only
See if you qualify

Looking for more information?