Why am I being taxed on 1099-R when the distribution code is 3

[SantinoD · Accepted solution]

Code 3 for Retirement distribution on Form 1099-R does not mean it is non-taxable. Distributions taken for disability are taxed as wages until you reach the minimum retirement age.

However, such a distribution is not subject to the 10% early withdrawal penalty, regardless of the age of the taxpayer.