Code 1 - Early distribution, no known exception, (under age 59 ½). The age rule does not apply for taxpayers that modify a series of substantially equal payments. Code 2 - Early distribution, exception applies (under age 59 1/2). Code 3 - Employer Paid Disability. Code 4 - Death. Benefits paid to Beneficiary, Estate, or Trust. Code 5 - Prohibited transaction. Also when an account is no longer an IRA. Code 6 - Section 1035 exchange a tax-free exchange of life insurance, annuity, or endowment contracts under section 1035. Code 7 - Normal distribution. Code 8 - Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in current year. Generally, code 8, treats taxable amount as earned income. And will be on line 7 of form 1040 with wages. Code 9 - Cost of current life insurance protection. Premiums paid by a trustee or custodian for current life insurance or like-kind insurance. Code A - May be eligible for 10-year tax option. Only taxpayers age 70 or older are eligible for the 10-year tax option method for computing the tax on lump-sum distributions. Code B - Designated Roth account distribution. Code D - Annuity payments from non-qualified annuities and distributions from Life Insurance Contracts that may be subject to tax under Section 1411. Code E - Distributions under Employee Plans Compliance Resolution System (EPCRS). Code F - Charitable Gift Annuity. Code G - Direct rollover of a distribution (other than a designated Roth account distribution) to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA. Code H - Direct rollover of a designated Roth account distribution to a Roth IRA. Code J - Early distribution from a Roth IRA, no known exception (in most cases, under age 59 1/2). Code L - Loans treated as deemed distributions. Code N - Recharacterized IRA contribution made for 2015 and recharacterized in 2015. Code P - Excess contributions plus earnings/excess deferrals taxable in 2014. Code Q - Qualified distribution from a Roth IRA. Code R - Recharacterized IRA contribution made for 2014 and recharacterized in 2015. Code S - Early distribution from a SIMPLE IRA in first 2 years, no known exception (under age 59 1/2). Code T - Roth IRA distribution, exception applies. Code U - Dividend distributed from ESOP under section 404(k). Code W - Charges or payments for purchasing qualified long-term care insurance contracts under combined arrangements. |