Some Roth IRA distributions may be partly taxable. Form 1099-R, box 7 codes J, Q and T identify a Roth IRA distribution, and determine the tax treatment.
- Code Q means the requirements for tax free distributions are met. This distribution is not taxable.
- Code J means an early withdrawal where the 5-year holding period is not met and there is no known exception. The earnings are taxable and without an exception, a 10% penalty applies.
- Code T means an early withdrawal and it is unknown if the 5-year holding period has been met and an exception applies. If the holding period is not met, the earnings are taxable.
For both Codes J and T, an exception means you are age 59½ or over, disabled, or the participant has died, so there is no penalty.
