topic Do I have to pay taxes on retirement funds that have been forfeited? in Retirement tax questions

Do I have to pay taxes on retirement funds that have been forfeited?

newnew1 — Wed, 11 Feb 2026 03:46:39 GMT

I received a 1099R with a distribution code of 7. The funds were not vested when my employment was terminated and were forfeited.

Re: Do I have to pay taxes on retirement funds that have been forfeited?

SharonD007 — Mon, 12 Feb 2024 01:06:26 GMT

It depends, all or some part of your distribution may be taxable. If you contributed to a per-tax 401(k), it allows you to contribute before your income is taxed so your withdrawals at retirement are taxable. Box 2a of your 1099-R show the taxable portion of your withdrawal.

For more information, refer to the TurboTax Help article Tax Tips for Retirement.

Re: Do I have to pay taxes on retirement funds that have been forfeited?

dmertz — Mon, 12 Feb 2024 12:59:00 GMT

A Form 1099-R with code 7 in box 7 is only for reporting funds that ware paid to you. Forfeited funds are not reported on a Form 1099-R. Contact the employer for an explanation.