The short answer

What it reportsDistributions from retirement or profit-sharing plans, any IRA, insurance contracts, and IRA recharacterizations.
Amounts to report$10 or more
To the recipientJanuary 31
To the IRS, on paperFebruary 28
To the IRS, electronicallyMarch 31

If one arrives

The distribution code in box 7 decides the treatment, including whether an early-distribution penalty applies. A rollover from one plan to another is reported here too and is often not taxable at all.

The form is how a payer tells the IRS what it paid. Its absence is not permission — income you received is reportable whether or not a form covers it, and a threshold decides only who must file, never what you owe.

What it reports

For most people who receive one, Form 1099-R reports money that came out of a retirement account: a withdrawal from a 401(k) or 403(b), from a traditional or Roth IRA, or from a SEP or SIMPLE IRA of the kind self-employed people set up for themselves. It also reports rollovers from one plan to another, which move the money without taxing it. The form's IRS title lists more than that, but the ordinary case is a withdrawal or a rollover.

The payer, the plan or the IRA custodian, files it for each distribution of $10 or more.

The boxes that decide the tax

Box What it holds
1 Gross distribution: everything paid out
2a Taxable amount
2b Checkboxes: taxable amount not determined, and total distribution
4 Federal income tax withheld
7a Distribution code, which says what kind of payment this was
7b Checked for a traditional IRA, SEP IRA or SIMPLE IRA

Box 7a is the one to read first. Three codes cover most forms:

Code Meaning
1 Early distribution, no known exception: under age 59½
7 Normal distribution, at age 59½ or older
G Direct rollover to another plan or an IRA

Not every box or code is covered here.

Early withdrawals: the 10% additional tax

A distribution taken before age 59½ generally carries a 10% additional tax, on top of income tax, on the part you must include in income. Topic 557 lists the exceptions for IRAs, among them disability, a series of substantially equal periodic payments, qualified higher education expenses and up to $10,000 for a first-time home purchase. Exceptions for employer plans differ. The additional tax is reported on Form 5329 and Schedule 2.

A code 1 in box 7a does not mean the payer has decided no exception applies, only that it does not know of one. If yours applies, you claim it on Form 5329.

Rollovers: 60 days, and the 20% trap

A rollover moves money from one eligible plan to another. If the plan pays it to you, you have 60 days to deposit it in the new plan. An employer plan must withhold 20% from an eligible rollover distribution paid to you, "even if you intend to roll it over later," so you receive only 80% and must find the other 20% yourself to roll over the full amount.

A direct rollover, from one plan to the other without passing through your hands, avoids both: "The mandatory withholding doesn't apply in a direct rollover," and there is nothing for you to redeposit. The 1099-R still arrives, with code G, and the rollover is still reported on your return.

For self-employed readers

Contributions to a SEP, SIMPLE or solo 401(k) are deducted on Schedule 1, line 16. The 1099-R is the other end of the same account, when the money comes out. The Schedule 1 deferral and the retirement contribution calculator cover the contribution side.

Common questions

I moved my old 401(k) straight into an IRA. Is that taxable?
Not if it was a direct rollover, which box 7 shows as code G. Topic 413: a rollover "isn't taxable (unless the rollover is to a Roth IRA or a designated Roth account from another type of plan or account), but it is reportable on your federal tax return."
Box 7 shows code 1. What does that mean?
An early distribution with no exception the payer knows of: code 1 is used when "the participant has not reached age 59½" and the payer does not know whether an exception applies. The 10% additional tax may apply unless you have an exception, which you claim on Form 5329.
20% was withheld, but I rolled the money over within 60 days. What now?
To defer tax on all of it, Topic 413 says "you'll have to add funds from other sources equal to the amount withheld." The 20% withheld is then credited against your tax for the year. A direct rollover avoids the withholding in the first place.
Box 2a is blank and box 2b is checked. Why?
The payer could not work out the taxable amount, so figuring it is left to you. Box 1 is the gross distribution either way.
I took money from my IRA before 59½ to buy my first home. Is there a 10% tax?
Not on up to $10,000. Topic 557 lists an early IRA distribution "Not in excess of $10,000 used in a qualified first-time home purchase" among the exceptions. Income tax still applies to the taxable part.

This page is for educational purposes only and does not constitute tax, legal, or financial advice. It covers United States federal reporting. Consult a qualified tax professional about your situation.

Official sources