Form 1099-R: What It's Used for, and Who Should File It

What Is Form 1099-R: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans?

Form 1099-R: Distributions From Pensions, Annuities, Retirement, or Profit-Sharing Plans is an Internal Revenue Service (IRS) tax form used for reporting passive income and distributions from retirement plans. The form deals specifically with annuities, profit-sharing plans, retirement plans, individual retirement accounts (IRAs), insurance contracts, or pensions. 

The form is one of many in the 1099 series. They are known as information returns and are used to report various types of income that a person may receive other than their salary, such as independent contractor income, interest, dividends, or government payments.

Key Takeaways

  • Form 1099-R is used to report distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions.?
  • Anyone who receives a distribution over $10 should receive a 1099-R form.
  • The form is provided by the plan issuer.
  • Form 1099-R is also used to record death or disability benefits that may be paid out to a beneficiary's estate.
  • Account rollovers and loans may also be recorded on form 1099-R.

Who Can File Form 1099-R: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans?

According to the IRS, an entity that manages any of the accounts listed below is required to fill out a 1099-R form for each distribution of over $10:

In addition, rollover transfers from one retirement account to another will also be recorded on form 1099-R. A direct rollover is recorded with the distribution code G or H in box 7.

Some plans allow individuals to borrow against the savings in their retirement account, provided that they repay the loan with interest over time. These loans are not recorded on Form 1099-R, since they are not considered a distribution.

However, if the borrower fails to make regular payments, the missed payments will be considered an early distribution and reported on form 1099-R with the distribution code L. These distributions are considered taxable income and may incur early withdrawal penalties.

Like most 1099s, 1099-R forms must be sent to recipients by Jan. 31 of the year following the tax year. Anyone who receives a 1099-R must include the amount shown on it in their income tax return and pay applicable taxes.

If you receive a 1099-R, keep in mind that not all distributions from retirement or tax-deferred accounts are subject to tax. A direct rollover from a 401(k) plan to an IRA is one example. If you are unsure whether a distribution is taxable, it may be a good idea to consult with a tax professional.

An individual who receives a 1099-R form in error should immediately contact the plan custodian to rectify the situation and avoid filing an incorrect tax return.

How to File Form 1099-R: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans

The form is provided by the plan issuer, who must give a copy to the IRS, the recipient of the distribution, and the recipient's state, city, or local tax department. As with other IRS forms, the 1099-R form should also include the payer's name, address, telephone number, and taxpayer identification number (TIN). It should also have the recipient's name, address, and taxpayer identification number, which for most individual taxpayers is their Social Security Number (SSN).

Some of the other items included on the form are the gross distribution paid during the tax year, the amount of taxable distribution, the federal income tax withheld at source, any contributions made to the investment, or insurance premiums paid, and a code representing the type of distributions made to the plan holder.

A 1099-R form uses a variety of numbered and lettered codes to indicate the type of distribution. They are entered in Box 7 on the form. A table of the codes is included in the instructions.

As noted above, Form 1099-R is used to record and report distributions from retirement accounts. In addition to the recipient's identifying information, including their name, date of birth, and other personal data, it also includes information about the nature of the money being distributed.

This denotes information about the owner's contributions to the account, the unrealized value of any securities held in it, capital gains, and any taxes that are due on the distribution. This information is then used by the owner of the account when they file their annual taxes.

Form 1099-R

Other Relevant Forms

Form 1099-R is one of many different types of 1099 forms, collectively referred to as the information return forms. Information returns are used by the IRS to keep taxpayers from underreporting their income. Each type of information return is intended to capture a different type of payment or transaction. Although there are approximately 16 types of information returns, most taxpayers will only ever receive a handful of them. Here are the most common Form 1099s.

Form 1099-INT: Interest Income

Form 1099-INT is issued by all financial institutions to investors at the end of the year. It includes a breakdown of all types of interest income and related expenses. All financial institutions and payers of interest must issue a 1099-INT for any party to whom they paid at least $10 of interest during the year.

Form 1099-DIV: Dividends and Distributions

Form 1099-DIV is sent by banks and other financial institutions to investors who receive dividends and distributions from any type of investment during a calendar year. Investors can receive multiple 1099-DIVs. Each 1099-DIV form should be reported on a taxpayer's tax filing.

Form 1099-MISC: Miscellaneous Income

Independent contractors, freelancers, sole proprietors, and self-employed individuals receive Form 1099-MISC from each client that paid them $600 or more in a calendar year. This form is also used to report miscellaneous compensation, such as rent, prizes, awards, healthcare payments, and payments to an attorney.

Form 1099-K: Payment Card and Third-Party Network Transactions

Form 1099-K reports the gross amount of all reportable payment transactions. Taxpayers are sent a Form 1099-K from a payment settlement entity if they receive payments in settlement of reportable payment transactions. A reportable payment transaction is a payment card transaction or a third-party network transaction, such as Venmo, Zelle, and Paypal.

Reportable transactions include any that arise from payment card transactions, such as debit, credit, and prepaid cards. Any transactions that are settled through third-party payment networks also qualify. The table below sets out minimum reporting thresholds.

Minimum Reporting Thresholds for Form 1099-K
Returns? Gross Payments? Transactions?
For calendar years before 2022? $20,000+ 200+
For calendar years after 2021 $600+ Any number

Source: Understanding Your Form 1099-K (IRS)

In other words, taxpayers should receive a 1099-K from all payment settlement entities that process debit card, credit card, or prepaid credit card payments on the taxpayer's behalf and from any PSE that processes more than $600 in third-party network transactions as of 2023. Payments to and from family members and friends are not reportable transactions.

Form 1099-B: Proceeds From Broker and Barter Exchange Transactions

Form 1099-B is used by brokerages and barter exchanges to record customers' gains and losses during a tax year. Individual taxpayers will receive this form (already filled out) from their brokers or barter exchange.

Form 1099-G: Certain Government Payments

Taxpayers receive Form 1099-G if they receive unemployment compensation payments, state or local income tax refunds, or certain other payments from a government or government agency. If you receive this form, you may need to report some of the information on your income tax return.

How Do I Get a Copy of My 1099-R Form?

The IRS requires plan managers to fill out and send form 1099-R by Jan. 31 in the year following a distribution of $10 or more. If you lose or do not receive your form 1099-R, you can request a replacement by contacting the company that manages your plan or retirement account.

How Do I Report Form 1099-R on Form 1041?

Form 1041 is used to report income taxes for an estate or trust. In the event that a death benefit or retirement distribution is paid out to a trust or estate, this income is recorded on Line 8: Other Income. In addition, a copy of the form 1099-R should be attached to the 1041 that it is being applied to.

What Are the Distribution Codes for Form 1099-R?

Distribution codes record the type of account that retirement funds are being distributed from and the nature of the distribution. For example, Roth account distributions are recorded as code B and early distributions from a Roth IRA are recorded under code J. These codes are also used to indicate if there are any special circumstances for the recipient, such as code 3 (disability) or code 4 (death). The full list of codes is listed in Table 1 of the instructions for form 1099-R.

The Bottom Line

Form 1099-R is one of many documents used to record taxable payments for the IRS. While it may seem complicated, most people will never need to fill out a form 1099-R by themselves. Instead, they should automatically receive the form whenever they take a distribution from a pension or retirement account.

Article Sources
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  1. Internal Revenue Service. "About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc."

  2. Internal Revenue Service. "Am I Required to File a Form 1099 or Other Information Return?"

  3. Internal Revenue Service. "Instructions for Form 1099-R and 5498," Page 16.

  4. Internal Revenue Service. "Instructions for Forms 1099-R and 5498 (2023)."

  5. Internal Revenue Service. "About Form 1099-INT, Interest Income."

  6. Internal Revenue Service. "About Form 1099-DIV, Dividends and Distributions."

  7. Internal Revenue Service. "About Form 1099-MISC: Miscellaneous Income."

  8. Internal Revenue Service. "Instructions for Form 1099-K."

  9. Internal Revenue Service. "About Form 1099-K, Payment Card and Third Party Network Transactions."

  10. Internal Revenue Service. "About Form 1099-B, Proceeds From Broker and Barter Exchange Transactions."

  11. Internal Revenue Service. "About Form 1099-G, Certain Government Payments."

  12. Internal Revenue Service. "Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2022)."

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