The distribution code 7 is for a normal distribution defined as (a) for a normal distribution from a plan, including a traditional IRA, section 401(k), or section 403(b) plan, if the employee/taxpayer is at least age 59 & 1/2, (b) for a Roth IRA conversion if the participant is at least age 59 & 1/2, and (c) to report a distribution from a life insurance, annuity, or endowment contract and for reporting income from a failed life insurance contract. Distribution code 7 is correct.
Yes. The income will be taxable on your state return. Enter it on your Federal return, and it will automatically report on the state.
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