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grattangbeaver
New Member

Will the error On form 1099 R box 7 the (distribution code) of a 1 instead .of 7 cause me to pay more tax.

 
5 Replies
grattangbeaver
New Member

Will the error On form 1099 R box 7 the (distribution code) of a 1 instead .of 7 cause me to pay more tax.

Since the age of 59 1/2 was reached before the Series of substantially equal periodic payments based on life expectancy were started why would the code  be 1  and not 7 be entered from the beginning of the 1 St year payments were made?
macuser_22
Level 15

Will the error On form 1099 R box 7 the (distribution code) of a 1 instead .of 7 cause me to pay more tax.

You would have to ask the issuer of the 1099-R that question.  Perhaps they have your age listed wrong or made an error.   You can ask them for a corrected 1099-R or just use the penalty exception.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
macuser_22
Level 15

Will the error On form 1099 R box 7 the (distribution code) of a 1 instead .of 7 cause me to pay more tax.

BTW:  The exception for being over age 59 1/2 is "other" on the exception screen - see the blue "explain this".
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
SamiaI
New Member

Will the error On form 1099 R box 7 the (distribution code) of a 1 instead .of 7 cause me to pay more tax.

Yes, if you have a code 1 in Box 7 of your 1099-R instead of 7 (normal distribution), you may have to pay 10% early withdrawal penalty.

There are exceptions to the 10% tax penalty for early distributions:

  • Death, or total and permanent disability
  • Series of substantially equal periodic payments based on life expectancy
  • Qualified first-time homebuyer distributions up to $10,000
  • Qualified higher education expenses
  • Certain medical insurance premiums paid while unemployed
  • Unreimbursed medical expenses that are more than a certain amount of your adjusted gross income
  • IRS levy
  • Certain distributions to qualified military reservists called to active duty
Unless you qualify for an exception, you’ll pay a 10% additional tax penalty.

macuser_22
Level 15

Will the error On form 1099 R box 7 the (distribution code) of a 1 instead .of 7 cause me to pay more tax.

In addition, being over the age of 59 1/2 is also an exception. Not all of the above exceptions apply to a pension or employer plan.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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