Form 1099R, Box 9b

[JohnB5677]

On the 1099-R, Box 9b is the "Total employee contribution".

• The Total employee contribution is the amount of after-tax dollars that the taxpayer contributed to the retirement plan over the years while he/she was employed.  This is called your Basis.
• When the taxpayer retires, then the pension or annuity from the retirement plan begins. As the payments are made to you, each payment consists of a little bit of that "basis" and a lot of the money that the company is contributing.
• You will not owe tax on the "basis", because it is after-tax dollars that you contributed. 
• The employer's contribution is, of course, taxable. 
• This means, for example if a taxpayer received $12,000 in pension payments.  Perhaps only $11,600 might be taxable.  The left over $400 of the payments was the return of the "basis".

[HoagHaven]

I'm 90.  Is there any way to subtract enough of my Total Employee Contributions (basis) (Box 9b) from my Gross Distribution (Box 1) so that it results in $0 as the taxable amount.  Currently, Box 2 say the taxable amount is "unknown".  If I follow the simplified method, it will take me 7-8 years to get my basis all back. I'm afraid I won't live that long...

[JamesG1]

Your method is not allowed.  The Simplified Method is required if you are under the age of age 75.

You may qualify to allocate Total Employee Contributions (basis) under the General Rule.  See IRS Publication 575 here.

Under the General Rule, you determine the tax-free part of each annuity payment based on the ratio of the cost of the contract to the total expected return. Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. To figure it, you must use life expectancy (actuarial) tables prescribed by the IRS.

Who must use the General Rule.

You must use the General Rule if you receive pension or annuity payments from a:

• Nonqualified plan (such as a private annuity, a purchased commercial annuity, or a nonqualified employee plan), or
• Qualified plan if you are age 75 or older on your annuity starting date and your annuity payments are guaranteed for at least 5 years.

More information

For complete information on using the General Rule, including the actuarial tables you need, see IRS Publication 939.

@HoagHaven