Instructions For Forms 1099-R And 5498 - 2015 (Page 14 of 23) in pdf

Form 1099-R. Read the codes carefully and enter them

If part of a distribution is paid in a direct rollover and

accurately because the IRS uses the codes to help

part is not, you must file a separate Form 1099-R for each

determine whether the recipient has properly reported the

part showing the appropriate code on each form.

distribution. If the codes you enter are incorrect, the IRS

Governmental section 457(b) plan distributions.

may improperly propose changes to the recipient's taxes.

Generally, a distribution from a governmental section

457(b) plan is not subject to the 10% additional tax under

When applicable, enter a numeric and an alpha code.

section 72(t). However, an early distribution from a

For example, when using Code P for a traditional IRA

governmental section 457(b) plan of an amount that is

distribution under section 408(d)(4), you must also enter

attributable to a rollover from another type of eligible

Code 1, if it applies. For a normal distribution from a

retirement plan or IRA is subject to the additional tax as if

qualified plan that qualifies for the 10-year tax option,

the distribution were from a plan described in section

enter Codes 7 and A. For a direct rollover to an IRA or a

401(a). See section 72(t)(9). If the distribution consists

qualified plan for the surviving spouse of a deceased

solely of amounts that are not attributable to such a

participant, or on behalf of a nonspouse designated

rollover, enter Code 2 in box 7. If the distribution consists

beneficiary, enter Codes 4 and G (Codes 4 and H if from a

solely of amounts attributable to such a rollover, then

designated Roth account to a Roth IRA). If two or more

enter the appropriate code in box 7 as if the distribution

distribution codes are not valid combinations, you must

were from a plan described in section 401(a). If the

file more than one Form 1099-R.

distribution is made up of amounts from both sources, you

Enter a maximum of two alpha/numeric codes in

must file separate Forms 1099-R for each part of the

box 7. See the Guide to Distribution Codes, later,

distribution unless Code 2 would be entered on

for allowable combinations. Only three numeric

each form.

CAUTION

combinations are permitted on one Form 1099-R: Codes

8 and 1, 8 and 2, or 8 and 4. If two or more other numeric

Box 8. Other

codes are applicable, you must file more than one Form

Enter the current actuarial value of an annuity contract

1099-R. For example, if part of a distribution is premature

that is part of a lump-sum distribution. Do not include this

(Code 1) and part is not (Code 7), file one Form 1099-R

item in boxes 1 and 2a.

for the part to which Code 1 applies and another Form

1099-R for the part to which Code 7 applies. In addition,

To determine the value of an annuity contract, show the

for the distribution of excess deferrals, parts of the

value as an amount equal to the current actuarial value of

distribution may be taxable in 2 different years. File

the annuity contract, reduced by an amount equal to the

separate Forms 1099-R using Code 8 or P to indicate the

excess of the employee's contributions over the cash and

year the amount is taxable.

other property (not including the annuity contract)

distributed.

Even if the employee/taxpayer is age 59

or over, use

Code 1 if a series of substantially equal periodic payments

If an annuity contract is part of a multiple recipient

was modified within 5 years of the date of the first

lump-sum distribution, enter in box 8, along with the

payment (within the meaning of section 72(q)(3) or (t)(4)),

current actuarial value, the percentage of the total annuity

if you have been reporting distributions in previous years

contract each Form 1099-R represents.

using Code 2.

Also, enter in box 8 the amount of the reduction in the

For example, Mr. B began receiving payments that

investment (but not below 0 (zero)) against the cash value

qualified for the exception for part of a series of

of an annuity contract or the cash surrender value of a life

substantially equal periodic payments under section 72(t)

insurance contract due to charges or payments for

(2)(A)(iv) when he was 57. When he was 61, Mr. B

qualified long-term care insurance contracts.

modified the payments. Because the payments were

modified within 5 years, use Code 1 in the year the

Box 9a. Your Percentage of Total Distribution

payments were modified, even though Mr. B is over 59

If this is a total distribution and it is made to more than one

If you do not know that the taxpayer meets the

person, enter the percentage received by the person

requirements for substantially equal periodic payments

whose name appears on Form 1099-R. You need not

under section 72(t)(2)(A)(iv), use Code 1 to report the

complete this box for any IRA distributions or for a

payments.

direct rollover.

For further guidance on what makes a series of

Box 9b. Total Employee Contributions

substantially equal periodic payments, see Notice

89-25, Q/A-12, as modified by Rev. Rul. 2002-62,

You are not required to enter the total employee

CAUTION

2002-42 I.R.B. 710. Notice 2004-15, 2004-9 I.R.B. 526,

contributions or designated Roth contributions in box 9b.

available at ,

However, because this information may be helpful to the

allows taxpayers to use one of three methods in Notice

recipient, you may choose to report them.

89-25, as modified by Rev. Rul. 2002-62, to determine

If you choose to report the total employee contributions

whether a distribution from a nonqualified annuity is part

or designated Roth contributions, do not include any

of a series of substantially equal periodic payments under

amounts recovered tax free in prior years. For a total

section 72(q)(2)(D).

distribution, report the total employee contributions or

designated Roth contributions in box 5 rather than in

box 9b.

-14-

Instructions for Forms 1099-R and 5498 (2015)

Instructions For Forms 1099-R And 5498 - 2015 Page 14

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