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Form 1099-R Distribution Codes: Box 7 Explained
Understand Form 1099-R distribution codes, including Box 7 codes, their meanings, and how each code is used to
report different types of retirement plan and IRA distributions.
By Charles Hardy | Last Updated: Oct 09, 2027
What is a distribution code on 1099-R?
A distribution code on 1099-R is a number or letter entered in Box 7a to identify the type of distribution reported on the form. The code gives the recipient and the IRS information about the nature of the distribution and helps determine how it should be treated for tax purposes.
For 2026, the IRS renumbered the former Box 7 as Box 7a, Distribution Code(s), and added separate Boxes 7b, 7c, and 7d. Box 7b identifies whether the distribution is from an IRA, SEP, or SIMPLE arrangement, while Box 7c identifies a Trump account and Box 7d reports earnings on certain excess Trump account contributions.
Where do you enter the distribution codes on Form 1099-R?
The 1099-R distribution codes are reported in Box 7a of the 2026 Form 1099-R. Box 7a is specifically labeled Distribution Code(s) and is used to report up to two applicable codes.
The 2026 Form 1099-R also includes separate boxes for other information:
| Box | What It Reports |
|---|---|
| 7a | Distribution code(s) |
| 7b | IRA/SEP/SIMPLE checkbox |
| 7c | Trump Account checkbox |
| 7d | Earnings on excess contributions distributed from a Trump Account |
The box 7 codes on 1099-R should be selected based on the IRS distribution code rules rather than solely on the age of the recipient or the type of account.
What are the 1099-R distribution codes reported on box 7?
The table below gives a quick overview of the codes used for 2026.
| Code | Distribution Type | Description |
|---|---|---|
| 1 | Early Distribution, No Known Exception | An early distribution made before age 59½ when the payer does not know whether an exception under Code 2, 3, or 4 applies. Code 1 is also used when the distribution may qualify for certain exceptions, but the payer does not know whether the requirements are met. |
| 2 | Early Distribution, Exception Applies | An early distribution made before age 59½ when the payer knows an exception to the additional 10% tax applies. Examples include a Roth IRA conversion, an IRS levy, certain distributions after separation from service at age 55 or later, certain public safety employee distributions, substantially equal periodic payments, and certain other qualifying exceptions. |
| 3 | Disability | A distribution made because the participant is disabled under the applicable IRS requirements. |
| 4 | Death | A distribution paid to a beneficiary because of the participant's death. This also applies to payments to an estate or trust, certain employer-paid death benefits, and reportable death benefits. |
| 5 | Prohibited Transaction | A distribution resulting from a prohibited transaction involving an IRA. The account is no longer treated as an IRA. |
| 6 | Section 1035 Exchange | A tax-free exchange of certain life insurance, annuity, long-term care insurance, or endowment contracts under Section 1035. |
| 7 | Normal Distribution | A normal distribution from a retirement plan or traditional IRA when the participant is at least age 59½. Code 7 also applies to a Roth IRA conversion when the participant is at least age 59½ and to certain distributions from life insurance, annuity, or endowment contracts. Code 7 is not used for a regular Roth IRA distribution. |
| 8 | Excess Contributions or Deferrals Taxable in 2026 | A corrective distribution of excess IRA contributions, excess deferrals, excess aggregate contributions, or related earnings that are taxable in 2026, unless Code P applies. |
| 9 | Cost of Current Life Insurance Protection | Premiums paid by a trustee or custodian for current life insurance or other insurance protection. |
| A | May Be Eligible for 10-Year Tax Option | A distribution for a participant born before January 2, 1936, or the participant's beneficiary, that may qualify for the 10-year tax option for lump-sum distributions. |
| B | Designated Roth Account Distribution | A distribution from a designated Roth account in a qualified retirement plan, Section 403(b) plan, or governmental Section 457(b) plan. |
| C | Reportable Death Benefits | A payment of reportable death benefits subject to Section 6050Y reporting requirements. |
| D | Nonqualified Annuity or Life Insurance Distribution | A distribution from a plan or arrangement not described in Sections 401(a), 403(a), 403(b), 408, 408A, or 457(b), including certain nonqualified annuity and life insurance distributions that may be subject to the net investment income tax. |
| E | EPCRS Distribution | A distribution made under the Employee Plans Compliance Resolution System. |
| F | Charitable Gift Annuity | A distribution from a charitable gift annuity. |
| G | Direct Rollover or Direct Payment | A direct rollover from a qualified plan, Section 403(b) plan, or governmental Section 457(b) plan to an eligible retirement plan or IRA. It can also apply to certain direct IRA payments to an accepting employer plan and certain in-plan Roth rollover transactions. |
| H | Direct Roth Rollover | A direct rollover of a designated Roth account distribution to a Roth IRA. |
| J | Early Roth IRA Distribution, No Known Exception | An early distribution from a Roth IRA or Roth SIMPLE IRA when Code Q or T does not apply. Code J is also used when another applicable code, such as Code 8 or P, applies to the distribution. |
| K | Traditional IRA Assets Without Readily Available FMV | A distribution of traditional IRA assets that do not have a readily available fair market value, such as certain private business interests, real estate, or other nonpublicly traded assets. |
| L | Deemed Distribution of Plan Loan | A plan loan treated as a deemed distribution under Section 72(p). Code L is not used for a plan loan offset. |
| M | Qualified Plan Loan Offset | A qualified plan loan offset, generally resulting from severance from employment or termination of the plan. |
| N | 2026 IRA Recharacterization | A 2026 IRA contribution recharacterized in 2026 to another type of IRA through a trustee-to-trustee transfer. |
| P | Prior-Year Excess Contribution or Deferral | An excess IRA contribution, excess deferral, excess aggregate contribution, or related earnings taxable in 2025 or an earlier year. |
| Q | Qualified Roth IRA Distribution | A Roth IRA distribution when the participant meets the 5-year holding period and is at least age 59½, deceased, or disabled. |
| R | Prior-Year IRA Recharacterization | A 2025 or earlier IRA contribution recharacterized in 2026 to another type of IRA through a trustee-to-trustee transfer. |
| S | Early SIMPLE IRA Distribution, No Known Exception | An early distribution from a SIMPLE IRA during the first 2 years of participation when the participant is under age 59½ and no exception under Section 72(t) is known to apply. Code S is not used when Code 3 or 4 applies. |
| T | Roth IRA Distribution, Exception Applies | A Roth IRA distribution when the participant is at least age 59½, deceased, or disabled, but the payer does not know whether the 5-year holding period has been met. |
| U | ESOP Dividend | Dividends distributed from an Employee Stock Ownership Plan under Section 404(k). |
| W | Qualified Long-Term Care Insurance Charges or Payments | Charges or payments for purchasing qualified long-term care insurance contracts under combined arrangements that qualify for the applicable exclusion under Section 72(e)(11). |
| Y | Qualified Charitable Distribution | A distribution made directly from an IRA to a charitable organization that the taxpayer intends to treat as a qualified charitable distribution. For tax year 2026, using Code Y is optional. |
How to choose the right box 7 distribution code?
Work through these questions in order:
-
1
Identify the account type.
Is it a qualified plan, a traditional IRA, a Roth IRA, a designated Roth account, an insurance or annuity contract, or a Trump account?
-
2
Identify what happened to the money.
Was it a normal withdrawal, an early withdrawal, a death benefit, a disability payment, a rollover, a corrective distribution, or a loan?
-
3
Check the participant's age against 59½.
For most traditional distributions, age separates Code 1, Code 2, and Code 7.
-
4
Use an exception code only when you know it applies.
Code 2 requires that you know an exception applies. If you do not know, early distributions use Code 1.
-
5
Check whether the codes can be paired.
If different portions of a distribution need codes that cannot be combined, file a separate Form 1099-R for each portion.
-
6
Complete Boxes 7b to 7d
where they apply.
Which 1099-R box 7 distribution codes can be combined?
Box 7a accepts a maximum of two codes, and the IRS limits which pairs are valid.
- Only three numeric combinations are permitted on one form: 8 with 1, 8 with 2, or 8 with 4.
- Any other combination of numeric codes requires separate forms. If part of a distribution is premature (Code 1) and part is not (Code 7), file one Form 1099-R for each.
- Alphabetic codes pair only with the codes listed for them in the tables above.
- Codes Q and T cannot be combined with any other code. If Code 8 or P applies to a Roth IRA distribution, use Code J instead.
- A split rollover needs two forms. If part of a distribution is a direct rollover and part is paid to the recipient, file a separate form for
each part.
| Combination | When it is used |
|---|---|
| 8 and 1 | Corrective distribution taxable in 2026 that is also an early distribution with no known exception |
| 8 and 2 | Corrective distribution taxable in 2026 where an exception to the additional tax applies |
| 8 and 4 | Corrective distribution taxable in 2026 paid after the participant's death |
| P and 1 | Prior-year corrective distribution from a traditional IRA that is also an early distribution |
| 7 and A | Normal distribution that may qualify for the 10-year tax option |
| 4 and G | Direct rollover for a surviving spouse or nonspouse designated beneficiary |
| 4 and H | Direct rollover from a designated Roth account to a Roth IRA for a surviving spouse or nonspouse designated beneficiary |
| B and 1 | Early distribution from a designated Roth account |
| B and 7 | Distribution from a designated Roth account to a participant who is 59½ or older |
| J and 8 | Corrective distribution of an excess Roth IRA contribution |
| Y and 7 | QCD from a non-inherited IRA |
| Y and 4 | QCD from an inherited IRA |
| Y and K | QCD of traditional IRA assets without a readily available fair market value |
For example, if a Trump account distributes $100 of excess contributions and $9 of attributable earnings, Box 1 shows $100, and Box 7d
shows $9.
A trustee-to-trustee transfer to a rollover Trump account is not reported on Form 1099-R. Do not check Box 7b for a Trump account distribution.
2026 updates to Form 1099-R distribution codes
The 2026 Form 1099-R includes several reporting changes that affect Box 7 and related information.
New Box 7c and Box 7d
Form 1099-R now includes:
- Box 7c: Trump Account checkbox
- Box 7d: Earnings on excess contributions distributed from a Trump Account
The IRS also provides specific distribution code rules for Trump Account distributions, including Code 8 for excess contributions, Code 4 for distributions upon death during the growth period, and Code G for qualified ABLE rollover contributions.
New Code Y for Qualified Charitable Distributions
Code Y is used for a qualified charitable distribution made directly from an IRA to an eligible charitable organization when the taxpayer intends to treat the payment as a QCD.
For 2026, the IRS makes Code Y optional. When it is used, it must be combined with Code 4, 7, or K, and Code Y must be entered first.
Common distribution code errors to avoid
Choosing the wrong distribution code on 1099-R can affect how the recipient's distribution is reported and taxed. The IRS specifically cautions filers to enter the codes accurately because it uses them to help determine whether the recipient has properly reported the distribution.
Here are some common errors to watch for:
- Using Code 7 for every distribution after age 59½: Code 7 generally applies to normal distributions, but certain situations require another code. For example, a modified series of substantially equal periodic payments can still require Code 1 even when the taxpayer is age 59½ or older.
- Using Code 1 when an exception is known: Code 2 should be used when the participant is under age 59½ and the payer knows an applicable exception applies.
- Confusing Code G and Code H: Code G generally applies to direct rollovers to an eligible retirement plan or IRA. Code H is specifically used for a direct rollover from a designated Roth account to a Roth IRA.
- Using Code Q or T incorrectly: Code Q applies to a qualified Roth IRA distribution when the applicable requirements are met. Code T applies when the participant is at least 59½, deceased, or disabled, but the payer does not know whether the 5-year holding period has been satisfied.
- Combining incompatible codes: Not every pair of 1099-R Box 7 codes can be reported on the same form. When incompatible codes apply to different portions of a distribution, separate Forms 1099-R are required.
- Using Code Y without the required companion code: When Code Y is used for a QCD in 2026, it must be combined with Code 4, 7, or K, with Code Y entered first.
- Failing to separate rollover and non-rollover amounts: If part of a distribution is directly rolled over and another part is paid to the recipient, each portion must be reported separately.
- Using Code J for every Roth IRA distribution: Code J generally applies to an early Roth IRA distribution when Code Q or T does not apply. The applicable code depends on the specific circumstances of the distribution.
Frequently asked questions
Code 1 is used for an early distribution when the participant is under age 59½ and the payer does not know whether an exception applies. Code 2 is used when the participant is under age 59½ and the payer knows that a qualifying exception applies.
Code 7 is commonly used for normal distributions when the participant is at least age 59½. However, the appropriate code depends on the specific circumstances of the distribution.
A prohibited transaction occurs when an IRA owner or another disqualified person improperly uses or deals with the IRA's assets. These transactions can involve the IRA owner, the IRA's fiduciary, or another disqualified person and may cause the account to lose its tax-advantaged status.
Disqualified persons generally include the IRA owner, the owner's fiduciary, and certain family members, including their spouse, ancestors, lineal descendants, and the spouses of their lineal descendants.
Yes. The IRS allows up to two codes in Box 7a when the applicable codes can be combined. Some combinations are specifically permitted, while others require separate Forms 1099-R.
Code J is generally used for an early distribution from a Roth IRA or Roth SIMPLE IRA when Code Q or T does not apply. Different codes apply when the distribution is an IRS levy, prohibited transaction, qualified distribution, or another transaction covered by a specific
IRS rule.
Code Q is used when the Roth IRA distribution meets the 5-year holding period and the participant is at least age 59½, deceased, or disabled. If another code such as Code 8 or P applies, the IRS instructs filers to use Code J instead.
The distribution code provides information about the type and circumstances of the distribution, but it does not by itself determine the recipient's final tax liability. Other information on Form 1099-R and the recipient's individual circumstances may also affect the tax treatment.
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