A code 3 1099-R under retirement age is a wage replacement so it counts as wages paid. After retirement age it becomes a pension on line 5a/5b.
It is taxable income either way. The only difference is, if wages it can be used for EIC if you otherwise qualify or is taxable compensation for IRA contributions.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
