I know distributions from a deferred compensation plan are taxed as regular income, but on my tax prep it appears these distributions are being exempted. The distribution code in box 7 on the 1099-R I received from the payer is "7", which I believe is incorrect for this distribution.
Should I have received a W2 from this payer? I have had this deferred compensation plan for over 20 years.
A 1099R is correct for a distribution from a 457(b) Plan.
A code of 7 is a normal distribution. Which if you are retired and/or over 59 1/2 is correct code.
You may want to EDIT the 1099R and go through the questions again that follow the 1099R if it not being taxed to you.
The 457 plan is a type of non-qualified, tax advantaged deferred-compensation retirement plan that is available for governmental and certain non-governmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre-tax or after-tax (Roth) basis.
A 1099R is correct for a distribution from a 457(b) Plan.
A code of 7 is a normal distribution. Which if you are retired and/or over 59 1/2 is correct code.
You may want to EDIT the 1099R and go through the questions again that follow the 1099R if it not being taxed to you.
The 457 plan is a type of non-qualified, tax advantaged deferred-compensation retirement plan that is available for governmental and certain non-governmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre-tax or after-tax (Roth) basis.
One important point, the non governmental 457b should issue a W-2. Governmental issues a 1099-R
Fidelity placed a '2' instead of a '7' in box 7 of my 1099-R for the distribution from my 457. Should I ask Fidelity to re-issue the 1099-R with the correct code on the form sent to the IRS, or should I put 7 instead of 2,on my tax form or should I place a 2 on my tax form, even though it isn't correct? Thanks.
A "2" represents an Early Withdrawal. Are you 59 1/2? It also indicates that an exception does apply. This is taxable income, but the question is, did you fall victim to the 10% penalty.
You can find this on schedule 2 line 6. If line 6 is blanki, you're good to go. If there is an amount on line 6, please go back through the questions to confirm your answers.