Do I have to pay taxes on retirement funds that have been forfeited?

Forum|Forum|2 years ago
February 12, 2024
2 replies
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I received a 1099R with a distribution code of 7. The funds were not vested when my employment was terminated and were forfeited.

TurboTax Deluxe Online

Best answer by dmertz

A Form 1099-R with code 7 in box 7 is only for reporting funds that ware paid to you. Forfeited funds are not reported on a Form 1099-R. Contact the employer for an explanation.

SharonD007

It depends, all or some part of your distribution may be taxable. If you contributed to a per-tax 401(k), it allows you to contribute before your income is taxed so your withdrawals at retirement are taxable. Box 2a of your 1099-R show the taxable portion of your withdrawal.

For more information, refer to the TurboTax Help article Tax Tips for Retirement.

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dmertzAnswer

Employee

A Form 1099-R with code 7 in box 7 is only for reporting funds that ware paid to you. Forfeited funds are not reported on a Form 1099-R. Contact the employer for an explanation.