Do I have to pay taxes on retirement funds that have been forfeited?

[newnew1]

I received a 1099R with a distribution code of 7. The funds were not vested when my employment was terminated and were forfeited.

[SharonD007]

It depends,  all or some part of your distribution may be taxable.  If you contributed to a per-tax 401(k), it allows you to contribute before your income is taxed so your withdrawals at retirement are taxable. Box 2a of your 1099-R show the taxable portion of your withdrawal.

For more information, refer to the TurboTax Help article Tax Tips for Retirement.

[dmertz · Accepted solution]

A Form 1099-R with code 7 in box 7 is only for reporting funds that ware paid to you.  Forfeited funds are not reported on a Form 1099-R.  Contact the employer for an explanation.