I have a 1099 R from a retirement clearing house. It has a distribution code of 1 on it. I am 70 years old. I worked for a hospital in Louisville from 94-2004. I had transferred my money back then to another Retirement account. Then in 2022 I get a letter from RCH saying I had money with them . Evidently the hospital couldn't find me so then sent the money to RCH. Lord knows how long they had the money to begin with because all they had was 24 dollars or so and they were charging 50 % to release the money.
So I don't understand how it is considered and early distribution since I am 70 yrs old. Also what should it be ? Normal distribution? I hate taxes....ugh! help!
Yes, it should have code 7 instead of code 1. They apparently do not have your birth date, so the used code 1 because they know you can claim an Other reason exception to the early-distribution penalty for being over age 59½. When you claim an Other reason exception, it is reported on line 2 of Form 5329 with code 12.
You are not permitted to change the code. You are permitted to claim an exception to the penalty on Form 5329. Only the payer is permitted to change the code by issuing a corrected Form 1099-R, but that's not worth the trouble when you can just claim the exception on Form 5329.
Yes, it should have code 7 instead of code 1. They apparently do not have your birth date, so the used code 1 because they know you can claim an Other reason exception to the early-distribution penalty for being over age 59½. When you claim an Other reason exception, it is reported on line 2 of Form 5329 with code 12.
Thank you. As I read the IRS part on distribution codes I noticed I could change it but wanted to make sure what I was thinking was correct. In the scheme of things it would not make a lot of difference since what I got from them was 13.00! Not sure how much was there in the beginning because they were charging me for it being with them and then charged me again to get the 13.00 . What a scam they have going.
You are not permitted to change the code. You are permitted to claim an exception to the penalty on Form 5329. Only the payer is permitted to change the code by issuing a corrected Form 1099-R, but that's not worth the trouble when you can just claim the exception on Form 5329.