IRA Rule 97T 1099-R Box 7

Simon888 · ‎June 4, 2019

IRA Rule 72T 1099-R Box 7 Code 2

I started Rule 72T at age 56 and 6 months. In 2017, I am 59 1/2(but only used 72T for four years). What is my 1099-R box 7 code on 2017 1099-R?. Did I continue to get code 2 or differ code? I got Code 2 last year.

MichaelDC · ‎June 4, 2019

If you got a Code 2 this year, continue with the same equal periodic payment treatment as the past 4 years. The payer is still required to continue code 2 until the 5 years are up.

From the IRS instructions for the 1099-R:

"Even if the employee/taxpayer is age 591 2 or over, use Code 1 if a series of substantially equal periodic payments was modified within 5 years of the date of the first payment (within the meaning of section 72(q)(3) or (t)(4)), if you have been reporting distributions in previous years using Code 2.

For example, Mr. B began receiving payments that qualified for the exception for part of a series of substantially equal periodic payments under section 72(t) (2)(A)(iv) when he was 57. When he was 61, Mr. B modified the payments. Because the payments were modified within 5 years, use Code 1 in the year the payments were modified, even though Mr. B is over 591 2.

If you do not know that the taxpayer meets the requirements for substantially equal periodic payments under section 72(t)(2)(A)(iv), use Code 1 to report the payments."

https://www.irs.gov/pub/irs-pdf/i1099r.pdf

Please feel free to post any additional details or questions in the comment section.

View solution in original post

MichaelDC · ‎June 4, 2019

If you got a Code 2 this year, continue with the same equal periodic payment treatment as the past 4 years. The payer is still required to continue code 2 until the 5 years are up.

From the IRS instructions for the 1099-R:

"Even if the employee/taxpayer is age 591 2 or over, use Code 1 if a series of substantially equal periodic payments was modified within 5 years of the date of the first payment (within the meaning of section 72(q)(3) or (t)(4)), if you have been reporting distributions in previous years using Code 2.

For example, Mr. B began receiving payments that qualified for the exception for part of a series of substantially equal periodic payments under section 72(t) (2)(A)(iv) when he was 57. When he was 61, Mr. B modified the payments. Because the payments were modified within 5 years, use Code 1 in the year the payments were modified, even though Mr. B is over 591 2.

If you do not know that the taxpayer meets the requirements for substantially equal periodic payments under section 72(t)(2)(A)(iv), use Code 1 to report the payments."

https://www.irs.gov/pub/irs-pdf/i1099r.pdf

Please feel free to post any additional details or questions in the comment section.