1099-R box 7 distribution code

Forum|Forum|2 years ago
February 20, 2024
1 reply
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I retired at 57 and have a pension. Box 7 on my 1099-R has a 2 in it for the distribution code. I understand this would be correct for when I retired but now at the age of 64 shouldn't the distribution code be 7? I would've thought this should have changed the year I turned 59 1/2? Thank you.

JohnB5677

Level 15

Yes, you can contact your plan administrator and request a change. However I don't expect it will change your tax return.

Code 2 in box 7 subjects you to the early withdrawal penalty for people under age 59 1/2.

I don't expect that you paid, nor will pay this penalty.

There are (2) reasons for this.

I expect that the IRA/SEP/SIMPLE Box is not checked.
- This is the first indication that it is a retirement plan.
In the interview, you should have indicated that you receive regular payments.
- The regular payment feature will also negate the penalty

Please contact us again with any questions, and provide some additional details.

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ragsplaceAuthor

Level 2

Hi John ,

I'm not concerned about my tax return for this year. Starting next year for me in Michigan on my state tax return I will get a tax break on my Michigan taxes for pension...my concern is how they will look at the code for me Michigan return and being eligible for the tax break?

ThomasM125

Level 15

The Michigan Retirement Pension Subtraction uses your age and the amount of your pension to determine your allowed subtraction. The code in box 7 should not affect this, but it would be best to contact your employer and request it be change to the correct code of "7" for normal distribution if that applies to you.

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