Yes, the code in box 7 of your 1099-R form is the basis for the type of retirement distribution you have. If box 7 of your 1099-R form shows code 7, the distribution will be shown as a normal, not early, distribution. If your box 7 shows a different code, you need to answer some follow-up questions to show whether the distribution is taxable, nontaxable, early, normal or an exception applies. To resolve this, review the box 7 code and the follow-up questions: Open your return. Select Federal, then Wages & Income. Scroll down to IRA, 401(k), Pension Plan Withdrawals (1099-R), under Retirement Plans and Social Security, select Start or Revisit to the right. Answer Yes to Did you get a 1099-R in 2023? Select Edit to the right of the 1099-R form in question. Review what's entered in TurboTax, even if you imported the information. Answer the rest of the questions in the section. If you still have questions after reviewing this section, respond back with the box 7 code and a brief description of the distribution, such as from an IRA, partially rolled-over, inherited account, etc.

Solved

TurboTax software is saying that I have taken early retirement monies from my retirement account. I'm 77 years old. Software is incorrect.

Forum|Forum|2 years ago
February 4, 2024
3 replies
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TurboTax Deluxe Online

Best answer by dmertz

TurboTax treats as an early retirement distribution only those distributions reported on a Form 1099-R that you have entered that has code 1 or code J included in box 7. If you have entered one of these forms, you can claim a code-12 exception to the early-distribution penalty on line 2 of Form 5329 by, when TurboTax asks if you "used your IRA to pay for any of these expenses," indicating the amount that is an "Incorrect Early Distribution." If the Form 1099-R also includes code 8 or P in box 7, instead indicate that the amount is a "Corrective distribution made before the due date of the tax return."

If the forms that you have entered do not have code 1 or code J in box 7, you are not being assessed an early-distribution penalty.

If you received a Form 1099-R with code 1 in box 7 or a Form 1099-R that has code J in box 7 but does not also have code 8 or code P in box 7, contact the payer to make sure that they have your correct birthdate.

J

JulieS

Yes, the code in box 7 of your 1099-R form is the basis for the type of retirement distribution you have.

If box 7 of your 1099-R form shows code 7, the distribution will be shown as a normal, not early, distribution.

If your box 7 shows a different code, you need to answer some follow-up questions to show whether the distribution is taxable, nontaxable, early, normal or an exception applies.

To resolve this, review the box 7 code and the follow-up questions:

Open your return.
Select Federal, then Wages & Income.
Scroll down to IRA, 401(k), Pension Plan Withdrawals (1099-R), under Retirement Plans and Social Security, select Start or Revisit to the right.
Answer Yes to Did you get a 1099-R in 2023?
Select Edit to the right of the 1099-R form in question.
Review what's entered in TurboTax, even if you imported the information.
Answer the rest of the questions in the section.

If you still have questions after reviewing this section, respond back with the box 7 code and a brief description of the distribution, such as from an IRA, partially rolled-over, inherited account, etc.

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D

dmertzAnswer

Employee

TurboTax treats as an early retirement distribution only those distributions reported on a Form 1099-R that you have entered that has code 1 or code J included in box 7. If you have entered one of these forms, you can claim a code-12 exception to the early-distribution penalty on line 2 of Form 5329 by, when TurboTax asks if you "used your IRA to pay for any of these expenses," indicating the amount that is an "Incorrect Early Distribution." If the Form 1099-R also includes code 8 or P in box 7, instead indicate that the amount is a "Corrective distribution made before the due date of the tax return."

If the forms that you have entered do not have code 1 or code J in box 7, you are not being assessed an early-distribution penalty.

If you received a Form 1099-R with code 1 in box 7 or a Form 1099-R that has code J in box 7 but does not also have code 8 or code P in box 7, contact the payer to make sure that they have your correct birthdate.

SteamTrain

Employee

AND, of course, you should also double-check the birthdate you entered in the My Info section, to make absolutely sure it has been recorded properly. Don't shortcut the date. Enter every digit like: 03/04/1946

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*