1099-R vs. W-2

[grovery3]

Soooo.  My father retired in 2002.  His pension income comes from 2 different plans (from the same employer, but it's managed by different companies) and they are reported on 2 separate 1099-R forms each year.  Each 1099-R is for different gross amounts, but those amounts remain the same (did that make sense?)  So for 20 years we get the same two 1099-R forms that have the same info every year.  Not a deviation ever. 

So THIS year (tax year 2021) one of the 1099-Rs has switched to a W-2!  The numbers are the same, but are now reported as wages I guess.  I was wondering if anyone knows how the switch benefits the company?  What do they GAIN by making this switch?  Will my father be at any sort of disadvantage tax-wise because of the switch?  In other words, is this change to his detriment as a tax payer?  Or it doesn't matter at all tax wise?  

[ColeenD3]

The best thing to do is ask why they are doing it this way now. There is no obvious benefit to the company. One factor might be the following, although it doesn't really fit the case. On the plus side, if he has wages, he could still contribute to an IRA.

According to the IRS:

"If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on line 1 of Form 1040 or 1040-SR until you reach minimum retirement age. Minimum retirement age is generally the age at which you can first receive a pension or annuity if you aren’t disabled."

[dmertz]

Sounds like this is a nonqualified deferred compensation plan that they were previously mistakenly reporting on Form 1099-R but should have been reporting on Form W-2 in boxes 1 and 11.