How to change box 7 on 1099-R form

[lasencio]

My husband took an early distribution from his IRA account.  He falls under the exception for being a public safety employee (firefighter).  But we call the provider and asked them to change box 7 to #2 but they said they couldn't, that we had to consult with our tax advisor.  How can I get the 1099-R updated to the correct code?

[dmertz · Accepted solution]

Being a public safety employee is not an exception to the penalty on an early-distribution from an IRA.  That exception only applies to distributions from the plan provided by the employer for which your husband was a public safety employee and only if he separated from service in or after the year he reached age 50.

[lasencio]

Thank you for responding dmertz..........

The plan was a 401K but was converted to IRA after my husband's family medical leave ran out and he was terminated (separated from service) at the age of 52.  Does that exception still apply?

[MarilynG1]

When you enter your 1099-R in TurboTax, pay attention to the follow-up questions.  Besides indicating that your husband was a Public Safety Employee, TurboTax notes that this appears to be an Early Distribution, then asks about Exceptions to the Early Distribution Penalty. 

Since his 401K was converted to an IRA, here's details about Early Withdrawal Penalties/Exceptions for an IRA that may apply to you, especially for medical expenses or health insurance premiums. 

[Edited 2/15/2024 | 8:20 pm]

@lasencio 

[dmertz]

Once rolled over to an IRA the age-50 exception for public safety employees is lost.  This exception was only applicable to distributions from the 401(k).