Am I going to get a '1' in box 7 of my 1099-R? 403...
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SteveInUkiah
Level 1

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

I switched jobs/orgs in February and in April took a $15K loan from my 403(b) TIAA account of the org I no longer work for. TIAA withheld taxes on it. I used the balance to pay down debts.

 

I've made the monthly auto-payments through checking and am on a 5-year plan. I'm 47.

 

I thought I did this right and but now am apprehensive that this will be treated as a regular distribution with the early penalty for withdrawal, not one with no tax consequences. Because of the distinction of a former vs. current employer. Am I going to get a 1 or an L in on that 1099-R, do you know?

7 Replies
dmertz
Level 15

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

This doesn't make sense.  Taxes cannot be withheld from a 403(b) loan because the loan is not a distribution.

SteveInUkiah
Level 1

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

This where I hope it was TIAA's mistake. $3,000 withheld for federal on $15,000 loan.

fanfare
Level 15

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

If tax was withheld you must get a tax document to show that.

If it is a loan assemble your proof documents .

fanfare
Level 15

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

You can request a corrected 1099-R if there is a discrepancy.

fanfare
Level 15

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

how much cash did you get? 15 k or 12 k ??

dmertz
Level 15

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

This is something that you'll have to sort out with TIAA.

 

It's quite unusual that a plan would permit a loan to be initiated from the account of a former employee.  Most plans only permit current employees to take out loans.

 

The fact that $3,000 was withheld for taxes seems to imply that this was a $15,000 distribution with the mandatory minimum of 20% withheld for taxes and not a loan, with the deadline for rolling over the distribution normally being the 60th day following the date of the distribution but because of the COVID disaster declaration that deadline would have been extended to July 15. 2020.  But that wouldn't explain why you would think that you had a 5 year loan and were able to make monthly repayments.  If this was indeed a distribution, the auto-payments made by July 15 could be considered to be rollover contributions, but any beyond that would be excess contributions subject to penalty.  Again, you'll need to sort this out with TIAA.

SteveInUkiah
Level 1

Am I going to get a '1' in box 7 of my 1099-R? 403(b) loan withdrawal question

Yes, a little less than $12K. About $300 withheld for state, too.

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