Form 1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (2013)
What Form 1099-R Is For
Form 1099-R is an information return that reports distributions of $10 or more from retirement accounts and similar arrangements. If you received money from a pension, 401(k), IRA, annuity, insurance contract, or other retirement plan during 2013, you should receive this form from the payer (the financial institution or employer that distributed the funds).
The form serves as your official record of retirement distributions for tax purposes. Think of it as similar to a W-2 for wages, but specifically for retirement money. The payer sends Copy A to the IRS, and you receive Copy B to attach to your federal tax return, along with Copy 2 for state tax purposes.
Form 1099-R reports various types of distributions, including normal retirement withdrawals, early distributions (before age 59½), required minimum distributions for those over 70½, disability payments from retirement plans, death benefits, loans from retirement plans treated as distributions, and rollovers between retirement accounts. The form uses distribution codes in Box 7 to identify the type of withdrawal, which determines your tax treatment and whether you might owe additional penalties.
Understanding this form is crucial because retirement distributions often have complex tax implications. Some portions may be tax-free (if you made after-tax contributions), some fully taxable, and some subject to early withdrawal penalties. The 1099-R provides the foundation for correctly reporting these amounts on your Form 1040 or 1040A.
When You’d Use Form 1099-R (Late/Amended Filing)
Normal Timeline
You should receive Form 1099-R by January 31, 2014 (for 2013 tax year distributions). Your tax return filing deadline is April 15, 2014, giving you time to review the form and prepare your return accurately.
When It’s Missing or Incorrect
If you haven't received your Form 1099-R by mid-February 2014, first contact the payer (your plan administrator or financial institution) to request a copy. Keep records of your contact attempts. If you still don't receive it by late February, you may call the IRS at 800-829-1040 for assistance. However, don't wait—you're still required to file your tax return on time even without the form. You can file using your own records of distributions received, though you should make every effort to obtain the official form.
Corrected Forms
Sometimes payers discover errors and issue a corrected Form 1099-R, which will have “CORRECTED” checked at the top. If you receive a corrected form after filing your return, you'll need to determine whether it changes your tax liability. If the correction affects your tax return, you must file Form 1040X (Amended U.S. Individual Income Tax Return) to correct your original filing. Attach the corrected 1099-R and explain the changes in Part III of Form 1040X.
Using Form 4852 as a Substitute
If your payer refuses or is unable to issue a correct Form 1099-R after repeated requests, you can use Form 4852 (Substitute for Form W-2, W-2c, or 1099-R) to report your retirement distributions. This form requires you to document your efforts to obtain the correct form and explain the discrepancy.
Key Rules for 2013
Reporting Threshold
Payers must issue Form 1099-R for distributions of $10 or more. However, even distributions under $10 are generally taxable and should be reported on your tax return.
Distribution Codes (Box 7)
- Code 1: Early distribution (under 59½) with no known exception — typically triggers 10% penalty
- Code 2: Early distribution with exception (disability, medical expenses, etc.) — no penalty
- Code 4: Death distribution to beneficiaries
- Code 7: Normal distribution (age 59½ or older)
- Code G: Direct rollover to another qualified retirement plan or IRA
- Code J: Early Roth IRA distribution
- Code P/8: Excess contributions corrected
Tax Withholding
Eligible rollover distributions from employer plans are subject to mandatory 20% federal income tax withholding unless you elect a direct rollover (trustee-to-trustee transfer) to another qualified plan or IRA. IRA distributions have different withholding rules—typically 10% unless you opt out using Form W-4P.
Required Minimum Distributions (RMDs)
If you turned 70½ in 2013 or earlier, you must take required minimum distributions from traditional IRAs and most employer retirement plans. Failure to take your RMD results in a 50% excise tax on the amount you should have withdrawn. Roth IRAs, however, don't require distributions during the owner's lifetime.
Roth IRA Rules
For Roth IRA distributions, Box 2a may be blank with “Taxable amount not determined” checked. You're responsible for calculating the taxable portion using Form 8606.
New for 2013
Distribution Code D was introduced to identify nonqualified annuity payments that may be subject to the 3.8% Net Investment Income Tax for high-income taxpayers.
Step-by-Step Guide (High Level)
Step 1: Receive and Review
When your Form 1099-R arrives (by January 31, 2014), carefully review all information. Verify your name, Social Security number, and distribution details.
Step 2: Understand the Boxes
- Box 1: Gross Distribution
- Box 2a: Taxable Amount
- Box 2b: Checkboxes for taxable amount not determined / total distribution
- Box 4: Federal Income Tax Withheld
- Box 5: Employee Contributions
- Box 7: Distribution Code
Step 3: Determine Taxable Amount
If “Taxable amount not determined” is checked, calculate it yourself using the Simplified Method or Publication 590 guidance.
Step 4: Report on Your Tax Return
Transfer information to Form 1040 or 1040A:
- IRA distributions: Lines 15a and 15b
- Pensions/annuities: Lines 16a and 16b
- Federal withholding: Line 62
Step 5: Check for Additional Taxes
If your distribution code indicates an early withdrawal (1, J, or S), use Form 5329 to determine if the 10% penalty applies.
Step 6: Attach Copy B
If Box 4 shows withholding, attach Copy B to your paper return or retain for e-filing records.
Common Mistakes and How to Avoid Them
Mistake #1: Ignoring “Taxable Amount Not Determined”
Calculate the taxable portion—don’t simply copy Box 1.
Mistake #2: Failing to Report Rollovers Properly
Report all rollovers, even if not taxable.
Mistake #3: Overlooking Early Distribution Penalties
Use Form 5329 to claim exceptions.
Mistake #4: Not Reconciling Multiple Forms
Combine totals from all 1099-R forms.
Mistake #5: Missing State Tax Reporting
Use Copy 2 for state filing—rules vary by state.
Mistake #6: Treating Roth IRA Distributions as Automatically Tax-Free
Use Form 8606 to verify qualified distributions.
Mistake #7: Forgetting Required Minimum Distributions
If you turned 70½ in 2013, take your RMD to avoid the 50% penalty.
What Happens After You File
IRS Matching Process
The IRS matches Copy A from your payer with your tax return. Discrepancies may trigger a CP2000 notice.
CP2000 Notice Response
Respond within 30 days with explanations or documentation. Common triggers include unreported distributions or incorrect rollovers.
If You Made a Mistake
File Form 1040X to amend your return. Generally, you have three years from the due date or two years from payment.
Refund Timing
- E-filed returns: ~21 days
- Paper returns: 6–8 weeks
Future Year Planning
Consider tax planning strategies such as:
- Spreading distributions over multiple years
- Qualified charitable distributions
- Roth conversions during low-income years
- Adjusting Form W-4P withholding
Recordkeeping
Keep Form 1099-R for at least three years (preferably seven). Maintain Form 8606 permanently.
FAQs
Q1: I took money from my IRA to pay medical bills, but Box 7 shows Code 1 (early distribution). Will I owe the 10% penalty?
Not necessarily. If medical expenses exceeded 10% of AGI (7.5% if born before 1949), you can claim an exception via Form 5329.
Q2: My Form 1099-R shows a large amount in Box 1, but I rolled it directly to another IRA. Why report it?
You must still report it, but mark it as a rollover on Form 1040 (line 15b shows “0”).
Q3: I’m 68 and received a distribution with Code 7. Any penalties?
No. Code 7 indicates a normal, penalty-free distribution.
Q4: Box 2a is blank. How do I find the taxable amount?
Use Form 8606 to calculate based on your nondeductible contributions.
Q5: I received Form 1099-R after filing. What now?
If it changes your tax, file Form 1040X to amend your return.
Q6: Can I deduct Box 4 (federal tax withheld)?
No. It’s a credit, not a deduction. Report it on Form 1040 line 62.
Q7: I turned 70½ in 2013. Do I have to take an RMD?
Yes. Take your RMD by April 1, 2014, or face a 50% penalty on the shortfall.
Additional Resources
- IRS Publication 575: Pension and Annuity Income
- IRS Publication 590-B: Distributions from IRAs
- IRS Form 5329: Additional Taxes on Qualified Plans
- IRS Form 8606: Nondeductible IRAs
