Instructions (Form 1099-R)

2016

Department of the Treasury
Internal Revenue Service

Instructions for Forms
1099-R and 5498

Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,
Insurance Contracts, etc., and IRA Contribution Information
Section references are to the Internal Revenue Code
unless otherwise noted.

You can get the general instructions at www.irs.gov/
form1099r or www.irs.gov/form5498.

Future Developments

Specific Instructions for Form 1099-R

For the latest information about developments related to
Forms 1099-R and 5498 and their instructions, such as
legislation enacted after they were published, go to
www.irs,gov/form1099r or www.irs.gov/form5498.

What's New
FATCA filing requirement check box. A new check
box was added to Form 1099-R to identify an FFI or a U.S.
payer filing this form to satisfy its chapter 4 reporting
requirement.
New early distribution exceptions. Public Laws 114-26
and 114-113 added Federal law enforcement officers,
Federal customs and border protection officers, Federal
firefighters, air traffic controllers, nuclear materials
couriers, members of the United States Capitol Police or
Supreme Court Police, and diplomatic security special
agents of the Department of State to the definition of
qualified public safety employees under 72(t)(10(B))
eligible for an early distribution exception for distributions
made after separation from service in or after the year the
employee has reached age 50. These changes are
effective for distributions made after December 31, 2015.
Extension of tax-free distributions from IRAs for
charitable purposes. Public Law 114-113 permanently
extends tax-free distributions from IRAs for charitable
purposes, for distributions made in tax year 2015 and
later. See the TIP, on page 1.

Reminder

In addition, see the 2016 General Instructions for Certain
Information Returns for information on the following
topics.
Who must file (nominee/middleman; certain FFIs and
U.S. payers that report on Form(s) 1099 to satisfy their
chapter 4 reporting requirements).
When and where to file.
Electronic reporting requirements.
Corrected and void returns.
Statements to recipients.
Taxpayer identification numbers.
Backup withholding.
Penalties.
The definitions of terms applicable for chapter 4
purposes that are referenced in these instructions.
Other general topics.

Jan 08, 2016

File Form 1099-R, Distributions From Pensions, Annuities,
Retirement or Profit-Sharing Plans, IRAs, Insurance
Contracts, etc., for each person to whom you have made
a designated distribution or are treated as having made a
distribution of $10 or more from profit-sharing or
retirement plans, any individual retirement arrangements
(IRAs), annuities, pensions, insurance contracts, survivor
income benefit plans, permanent and total disability
payments under life insurance contracts, charitable gift
annuities, etc.
Also, report on Form 1099-R death benefit payments
made by employers that are not made as part of a
pension, profit-sharing, or retirement plan. See Box 1,
later.
Reportable disability payments made from a retirement
plan must be reported on Form 1099-R.
Generally, do not report payments subject to
withholding of social security and Medicare taxes on this
form. Report such payments on Form W-2, Wage and Tax
Statement.
Generally, do not report amounts totally exempt from
tax, such as workers' compensation and Department of
Veterans Affairs (VA) payments. However, if part of the
distribution is taxable and part is nontaxable, report the
entire distribution in box 1 and the taxable part in box 2a
when known.
There is no special reporting for qualified
charitable distributions under section 408(d)(8),
qualified health savings account (HSA) funding
distributions described in section 408(d)(9), or for the
payment of qualified health insurance premiums
(including long-term care insurance premiums) for retired
public safety officers described in section 402(l).

TIP

Military retirement annuities. Report payments to
military retirees or payments of survivor benefit annuities
on Form 1099-R. Report military retirement pay awarded
as a property settlement to a former spouse under the
name and taxpayer identification number (TIN) of the
recipient, not that of the military retiree.
Use Code 7 in box 7 for reporting military
pensions or survivor benefit annuities. Use Code
CAUTION
4 for reporting death benefits paid to a survivor
beneficiary on a separate Form 1099-R. Do not combine
with any other codes.

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Cat. No. 27987M

insurance contract; or (b) a contract of endowment
insurance for another contract of endowment insurance
that provides for regular payments to begin no later than
they would have begun under the old contract, or for an
annuity contract, or for a qualified long-term care
insurance contract; or (c) an annuity contract for an
annuity contract or for a qualified long-term care insurance
contract; or (d) a qualified long-term care insurance
contract for a qualified long-term care insurance contract.
A contract shall not fail to be treated as an annuity
contract or as a life insurance contract solely because a
qualified long-term care insurance contract is a part of or a
rider on such contract. However, the distribution of other
property or the cancellation of a contract loan at the time
of the exchange may be taxable and reportable on a
separate Form 1099-R.
These exchanges of contracts are generally reportable
on Form 1099-R. However, reporting on Form 1099-R is
not required if (a) the exchange occurs within the same
company, (b) the exchange is solely a contract for
contract exchange, as defined above, that does not result
in a designated distribution, and (c) the company
maintains adequate records of the policyholder's basis in
the contracts. For example, a life insurance contract
issued by Company X received in exchange solely for
another life insurance contract previously issued by
Company X does not have to be reported on Form 1099-R
as long as the company maintains the required records.
See Rev. Proc. 92-26, 1992-1 C.B. 744, for certain
exchanges for which reporting is not required under
section 6047(d). Also see Rev. Rul. 2007-24, 2007-21
I.R.B. 1282, available at www.irs.gov/irb/2007-21_IRB/
ar15.html for certain transactions that do not qualify as
tax-free exchanges. For more information on partial
exchanges of annuity contracts, see Rev. Proc. 2011-38,
2011-30 I.R.B. 66, available at www.irs.gov/irb/
2011-30_IRB/ar09.html.
For more information on reporting taxable exchanges,
see Box 1, later.

Governmental section 457(b) plans. Report on Form
1099-R, not Form W-2, income tax withholding and
distributions from a governmental section 457(b) plan
maintained by a state or local government employer.
Distributions from a governmental section 457(b) plan to a
participant or beneficiary include all amounts that are paid
from the plan. For more information, see Notice 2003-20
which is on page 894 of Internal Revenue Bulletin
2003-19, at www.irs.gov/pub/irs-irbs/irb03-19.pdf. Also
see Governmental section 457(b) plan distributions, later,
for information on distribution codes.
Nonqualified plans. Report any reportable distributions
from commercial annuities. Report distributions to
employee plan participants from section 409A
nonqualified deferred compensation plans and eligible
nongovernmental section 457(b) plans on Form W-2, not
on Form 1099-R; for nonemployees, these payments are
reportable on Form 1099-MISC. Also, report distributions
to beneficiaries of deceased plan participants on Form
1099-MISC. See the Instructions for Form 1099-MISC for
more information.
Section 404(k) dividends. Distributions of section
404(k) dividends from an employee stock ownership plan
(ESOP), including a tax credit ESOP, are reported on
Form 1099-R. Distributions other than section 404(k)
dividends from the plan must be reported on a separate
Form 1099-R.
Section 404(k) dividends paid directly from the
corporation to participants or their beneficiaries are
reported on Form 1099-DIV. See Announcement
2008-56, 2008-26 I.R.B. 1192, available at www.irs.gov/
irb/2008-26_IRB/ar11.html.
Charitable gift annuities. If cash or capital gain property
is donated in exchange for a charitable gift annuity, report
distributions from the annuity on Form 1099-R. See
Charitable gift annuities, later.
Life insurance, annuity, and endowment contracts.
Report payments of matured or redeemed annuity,
endowment, and life insurance contracts. However, you
do not need to file Form 1099-R to report the surrender of
a life insurance contract if it is reasonable to believe that
none of the payment is includible in the income of the
recipient. If you are reporting the surrender of a life
insurance contract, see Code 7, later. See, however, Box
1, later, for FFIs reporting in a manner similar to section
6047(d) for chapter 4 purposes.
Report premiums paid by a trustee or custodian for the
cost of current life or other insurance protection. Costs of
current life insurance protection are not subject to the 10%
additional tax under section 72(t). See Cost of current life
insurance protection, later.
Report charges or payments for a qualified long-term
care insurance contract against the cash value of an
annuity contract or the cash surrender value of a life
insurance contract, which is excludable from gross
income under section 72(e)(11). See Code W, later.
Section 1035 exchange. A tax-free section 1035
exchange is the exchange of (a) a life insurance contract
for another life insurance contract, or for an endowment or
annuity contract, or for a qualified long-term care

Prohibited transactions. If an IRA owner engages in a
prohibited transaction with respect to an IRA, the assets of
the IRA are treated as distributed on the first day of the tax
year in which the prohibited transaction occurs. IRAs that
hold non-marketable securities and/or closely held
investments, in which the IRA owner effectively controls
the underlying assets of such securities or investments,
have a greater potential for resulting in a prohibited
transaction. Enter Code 5 in box 7.

Designated Roth Account Contributions

An employer offering a section 401(k), 403(b), or
governmental section 457(b) plan may allow participants
to contribute all or a portion of the elective deferrals they
are otherwise eligible to make to a separate designated
Roth account established under the plan. Contributions
made under a section 401(k) plan must meet the
requirements of Regulations section 1.401(k)-1(f)
(Regulations section 1.403(b)-3(c) for a section 403(b)
plan). Under the terms of the section 401(k) plan, section
403(b) plan, or governmental section 457(b) plan, the
designated Roth account must meet the requirements of
section 402A.
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Instructions for Forms 1099-R and 5498 (2016)

!

CAUTION

A separate Form 1099-R must be used to report
the total annual distribution from a designated
Roth account.

Roth IRA conversions. You must report a traditional,
SEP, or SIMPLE IRA distribution that you know is
converted this year to a Roth IRA in boxes 1 and 2a
(checking box 2b “Taxable amount not determined”
unless otherwise directed elsewhere in these
instructions), even if the conversion is a trustee-to-trustee
transfer or is with the same trustee. Enter Code 2 or 7 in
box 7 depending on the participant's age.

Distributions allocable to an in-plan Roth rollover
(IRR). The distribution of an amount allocable to the
taxable amount of an in-plan Roth rollover (IRR), made
within the 5-year period beginning with the first day of the
participant’s tax year in which the rollover was made, is
treated as includible in gross income for purposes of
applying section 72(t) to the distribution. The total amount
allocable to such an IRR is reported in box 10. See the
instructions for Box 10, later.

IRA Revocation or Account Closure

If a traditional or Roth IRA is revoked during its first 7 days
(under Regulations section 1.408-6(d)(4)(ii)) or is closed
at any time by the IRA trustee or custodian due to a failure
of the taxpayer to satisfy the Customer Identification
Program requirements described in section 326 of the
USA PATRIOT Act, the distribution from the IRA must be
reported. In addition, Form 5498, IRA Contribution
Information, must be filed to report any regular, rollover,
Roth IRA conversion, SEP IRA, or SIMPLE IRA
contribution to an IRA that is subsequently revoked or
closed by the trustee or custodian.

IRA Distributions
For deemed IRAs under section 408(q), use the
rules that apply to traditional IRAs or Roth IRAs
as applicable. Simplified employee pension
(SEP) IRAs and savings incentive match plan for
employees (SIMPLE) IRAs, however, may not be used as
deemed IRAs.

TIP

If a regular contribution is made to a traditional or Roth
IRA that later is revoked or closed, and a distribution is
made to the taxpayer, enter the gross distribution in
box 1. If no earnings are distributed, enter 0 (zero) in
box 2a and Code 8 in box 7 for a traditional IRA and Code
J for a Roth IRA. If earnings are distributed, enter the
amount of earnings in box 2a. For a traditional IRA, enter
Codes 1 and 8, if applicable, in box 7; for a Roth IRA,
enter Codes J and 8, if applicable. These earnings could
be subject to the 10% early distribution tax under section
72(t). If a rollover contribution is made to a traditional or
Roth IRA that later is revoked or closed, and distribution is
made to the taxpayer, enter in boxes 1 and 2a of Form
1099-R the gross distribution and the appropriate code in
box 7 (Code J for a Roth IRA). Follow this same
procedure for a transfer from a traditional or Roth IRA to
another IRA of the same type that later is revoked or
closed. The distribution could be subject to the 10% early
distribution tax under section 72(t).

Deemed IRAs. For more information on deemed IRAs in
qualified employer plans, see Regulations section
1.408(q)-1.
IRAs other than Roth IRAs. Unless otherwise
instructed, distributions from any IRA that is not a Roth
IRA must be reported in boxes 1 and 2a. Check the
“Taxable amount not determined” box in box 2b. But see:
Traditional, SEP, or SIMPLE IRA, later, for how to
report the withdrawal of IRA contributions under section
408(d)(4);
Transfers, later, for information on trustee-to-trustee
transfers, including recharacterizations;
Reporting a corrective distribution from an IRA under
section 408(d)(5), later;
Reporting IRA revocations or account closures due to
Customer Identification Program failures, later; and
Reporting a transfer from a SIMPLE IRA to a
non-SIMPLE IRA within the first 2 years of plan
participation, later.
The direct rollover provisions beginning later do not
apply to distributions from any IRA. However, taxable
distributions from traditional IRAs and SEP IRAs may be
rolled over into an eligible retirement plan. See section
408(d)(3). SIMPLE IRAs may also be rolled over into an
eligible retirement plan, but only after the 2-year period
described in section 72(t)(6).
An IRA includes all investments under one IRA plan or
account. File only one Form 1099-R for distributions from
all investments under one plan that are paid in 1 year to
one recipient, unless you must enter different codes in
box 7. You do not have to file a separate Form 1099-R for
each distribution under the plan.

If an IRA conversion contribution or a rollover from a
qualified plan is made to a Roth IRA that later is revoked
or closed, and a distribution is made to the taxpayer, enter
the gross distribution in box 1 of Form 1099-R. If no
earnings are distributed, enter 0 (zero) in box 2a and
Code J in box 7. If earnings are distributed, enter the
amount of the earnings in box 2a and Code J in box 7.
These earnings could be subject to the 10% early
distribution tax under section 72(t).
If an employer SEP IRA or SIMPLE IRA plan
contribution is made and the SEP IRA or SIMPLE IRA is
revoked by the employee or is closed by the trustee or
custodian, report the distribution as fully taxable.
For more information on IRAs that have been revoked,
see Rev. Proc. 91-70, 1991-2 C.B. 899.

Roth IRAs. For distributions from a Roth IRA, report the
gross distribution in box 1 but generally leave box 2a
blank. Check the “Taxable amount not determined” box in
box 2b. Enter Code J, Q, or T as appropriate in box 7. Do
not use any other codes with Code Q or Code T. You may
enter Code 8 or P with Code J. For the withdrawal of
excess contributions, see Roth IRA, later. It is not
necessary to mark the IRA/SEP/SIMPLE checkbox.
Instructions for Forms 1099-R and 5498 (2016)

Deductible Voluntary Employee Contributions
(DVECs)

If you are reporting a total distribution from a plan that
includes a distribution of DVECs, you may file a separate
Form 1099-R to report the distribution of DVECs. If you

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section 401(k)) and excess aggregate contributions
(under section 401(m)) and earnings.
6. Loans treated as deemed distributions (under
section 72(p)). However, plan loan offset amounts can be
eligible rollover distributions. See Regulations section
1.402(c)-2, Q/A-9.
7. Section 404(k) dividends.
8. Cost of current life insurance protection.
9. Distributions to a payee other than the employee,
the employee's surviving spouse, a spouse or former
spouse who is an alternate payee under a QDRO, or a
nonspouse designated beneficiary.
10. Any hardship distribution.
11. A permissible withdrawal under section 414(w).
12. Prohibited allocations of securities in an S
corporation that are treated as deemed distributions.
13. Distributions of premiums for accident or health
insurance under Regulations section 1.402(a)-1(e).

do, report the distribution of DVECs in boxes 1 and 2a on
the separate Form 1099-R. For the direct rollover
(explained later) of funds that include DVECs, a separate
Form 1099-R is not required to report the direct rollover of
the DVECs.

Direct Rollovers

You must report a direct rollover of an eligible rollover
distribution. A direct rollover is the direct payment of the
distribution from a qualified plan, a section 403(b) plan, or
a governmental section 457(b) plan to a traditional IRA,
Roth IRA, or other eligible retirement plan. For additional
rules regarding the treatment of direct rollovers from
designated Roth accounts, see Designated Roth
accounts, later. A direct rollover may be made for the
employee, for the employee's surviving spouse, for the
spouse or former spouse who is an alternate payee under
a qualified domestic relations order (QDRO) or for a
nonspouse designated beneficiary, in which case the
direct rollover can only be made to an inherited IRA. If the
distribution is paid to the surviving spouse, the distribution
is treated in the same manner as if the spouse were the
employee. See Part V of Notice 2007-7, 2007-5 I.R.B.
395, available at www.irs.gov/irb/2007-05_IRB/ar11.html,
which has been modified by Notice 2009-82, 2009-41
I.R.B. 491, available at www.irs.gov/irb/2009-41_IRB/
ar12.html for guidance on direct rollovers by nonspouse
designated beneficiaries. See also Notice 2008-30, Part II,
2008-12 I.R.B. 638, available at www.irs.gov/irb/
2008-12_IRB/ar11.html, which has been amplified and
clarified by Notice 2009-75, 2009-39 I.R.B. 436, available
at www.irs.gov/irb/2009-39_IRB/ar15.html, for questions
and answers covering rollover contributions to Roth IRAs.

!

CAUTION

Amounts paid under an annuity contract purchased for
and distributed to a participant under a qualified plan can
qualify as eligible rollover distributions. See Regulations
section 1.402(c)-2, Q/A-10.
Automatic rollovers. Eligible rollover distributions may
also include involuntary distributions that are more than
$1,000 but $5,000 or less and are made from a qualified
plan to an IRA on behalf of a plan participant. Involuntary
distributions are generally subject to the automatic rollover
provisions of section 401(a)(31)(B) and must be paid in a
direct rollover to an IRA, unless the plan participant elects
to receive the distribution directly.
For information on the notification requirements, see
Explanation to Recipients Before Eligible Rollover
Distributions (Section 402(f) Notice), later. For additional
information, also see Notice 2005-5, 2005-3 I.R.B. 337,
available at www.irs.gov/irb/2005-03_IRB/ar10.html,
modified by Notice 2005-95, 2005-51 I.R.B. 1172,
available at www.irs.gov/irb/2005-51_IRB/ar12.html.

Notice 2007-7 and Notice 2008-30 do not reflect
changes made to section 402 by the Worker,
Retiree, and Employer Recovery Act of 2008.

An eligible rollover distribution is any distribution of all
or any portion of the balance to the credit of the employee
(including net unrealized appreciation (NUA)) from a
qualified plan, a section 403(b) plan, or a governmental
section 457(b) plan except the following.
1. One of a series of substantially equal periodic
payments made at least annually over:
a. The life of the employee or the joint lives of the
employee and the employee's designated beneficiary,
b. The life expectancy of the employee or the joint life
and last survivor expectancy of the employee and the
employee's designated beneficiary, or
c. A specified period of 10 years or more.
2. A required minimum distribution (RMD) under
section 401(a)(9). A plan administrator is permitted to
assume there is no designated beneficiary for purposes of
determining the minimum distribution.
3. Elective deferrals (under section 402(g)(3)) and
employee contributions (including earnings on each)
returned because of the section 415 limits.
4. Corrective distributions of excess deferrals (under
section 402(g)) and earnings.
5. Corrective distributions of excess contributions
under a qualified cash or deferred arrangement (under

Reporting a direct rollover. Report a direct rollover in
box 1 and a 0 (zero) in box 2a, unless the rollover is a
direct rollover of a qualified rollover contribution other than
from a designated Roth account. See Qualified rollover
contributions as defined in section 408A(e), later. You do
not have to report capital gain in box 3 or NUA in box 6.
Enter Code G in box 7 unless the rollover is a direct
rollover from a designated Roth account to a Roth IRA.
See Designated Roth accounts, later. If the direct rollover
is made by a nonspouse designated beneficiary, also
enter Code 4 in box 7.
Prepare the form using the name and social security
number (SSN) of the person for whose benefit the funds
were rolled over (generally the participant), not those of
the trustee of the traditional IRA or other plan to which the
funds were rolled.
If part of the distribution is a direct rollover and part is
distributed to the recipient, prepare two Forms 1099-R.
For guidance on allocation of after-tax amounts to
rollovers, see Notice 2014-54, 2014-41, I.R.B. 670
available at www.irs.gov/irb/2014-41_IRB/ar11.html.
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Instructions for Forms 1099-R and 5498 (2016)

For a direct rollover of a distribution from a section
401(k) plan, a section 403(b) plan, or a governmental
section 457(b) plan to a designated Roth account in the
same plan, enter the amount rolled over in box 1, the
taxable amount in box 2a, and any basis recovery amount
in box 5. Use Code G in box 7.
Qualified rollover contributions as defined in
section 408A(e). A qualified rollover contribution as
defined in section 408A(e) is:
A rollover contribution to a Roth IRA from another IRA
that meets the requirements of section 408(d)(3), or
A rollover contribution to a Roth IRA from an eligible
retirement plan (other than an IRA) that meets the
requirements of section 408A(e)(1)(B).
For reporting a rollover from an IRA other than a Roth
IRA to a Roth IRA, see Roth IRA conversions, earlier and
later.
For a direct rollover of an eligible rollover distribution to
a Roth IRA (other than from a designated Roth account),
report the total amount rolled over in box 1, the taxable
amount in box 2a, and any basis recovery amount in
box 5. (See the instructions for Box 5, later.) Use Code G
in box 7. If the direct rollover is made on behalf of a
nonspouse designated beneficiary, also enter Code 4 in
box 7.
For reporting instructions for a direct rollover from a
designated Roth account, see Designated Roth accounts,
earlier.

For more information on eligible rollover distributions,
including substantially equal periodic payments, RMDs,
and plan loan offset amounts, see Regulations sections
1.402(c)-2 and 1.403(b)-7(b). See Rev. Rul. 2014-9,
2014-17 I.R.B. 975 available at www.irs.gov/irb/
2014-17_IRB/ar05.html, for information on rollovers to
qualified plans. Also, see Rev. Rul. 2002-62, which is on
page 710 of Internal Revenue Bulletin 2002-42 at
www.irs.gov/pub/irs-irbs/irb02-42.pdf for guidance on
substantially equal periodic payments.
For information on distributions of amounts
attributable to rollover contributions separately
accounted for by an eligible retirement plan and if
permissible timing restrictions apply, see Rev. Rul.
2004-12, 2004-7 I.R.B. 478, available at www.irs.gov/irb/
2004-07_IRB/ar08.html, modified by Notice 2013-74,
2013-52 I.R.B. 819, available at www.irs.gov/irb/
2013-52_IRB/ar11.html.

TIP

Designated Roth accounts. A direct rollover from a
designated Roth account may only be made to another
designated Roth account or to a Roth IRA. A distribution
from a Roth IRA, however, cannot be rolled over into a
designated Roth account. In addition, a plan is permitted
to treat the balance of the participant's designated Roth
account and the participant's other accounts under the
plan as accounts held under two separate plans for
purposes of applying the automatic rollover rules of
section 401(a)(31)(B) and Q/A-9 through Q/A-11 of
Regulations section 1.401(a)(31)-1. Thus, if a participant's
balance in the designated Roth account is less than $200,
the plan is not required to offer a direct rollover election or
to apply the automatic rollover provisions to such balance.
A distribution from a designated Roth account that is a
qualified distribution is tax free. A qualified distribution is a
payment that is made both after age 591 2 (or after death or
disabililty) and after the 5-taxable-year period that begins
with the first day of the first taxable year in which the
employee makes a contribution to the designated Roth
account. Certain amounts, including corrective
distributions, cannot be qualified distributions. See
Regulations section 1.402A-1.
If any portion of a distribution from a designated Roth
account that is not includible in gross income is to be
rolled over into a designated Roth account under another
plan, the rollover must be accomplished by a direct
rollover. Any portion not includible in gross income that is
distributed to the employee, however, cannot be rolled
over to another designated Roth account, though it can be
rolled over into a Roth IRA within the 60-day period
described in section 402(c)(3). In the case of a direct
rollover, the distributing plan is required to report to the
recipient plan the amount of the investment (basis) in the
contract and the first year of the 5-taxable-year period, or
that the distribution is a qualified distribution.
For a direct rollover of a distribution from a designated
Roth account to a Roth IRA, enter the amount rolled over
in box 1 and 0 (zero) in box 2a. Use Code H in box 7. For
all other distributions from a designated Roth account, use
Code B in box 7, unless Code E applies. If the direct
rollover is from one designated Roth account to another
designated Roth account, also enter Code G in box 7.
Instructions for Forms 1099-R and 5498 (2016)

Explanation to Recipients Before Eligible
Rollover Distributions (Section 402(f) Notice)

For qualified plans, section 403(b) plans, and
governmental section 457(b) plans, the plan administrator
must provide to each recipient of an eligible rollover
distribution an explanation using either a written paper
document or an electronic medium (section 402(f) notice).
The explanation must be provided no more than 180 days
and no fewer than 30 days before making an eligible
rollover distribution or before the annuity starting date.
However, if the recipient who has received the section
402(f) notice affirmatively elects a distribution, you will not
fail to satisfy the timing requirements merely because you
make the distribution fewer than 30 days after you
provided the notice as long as you meet the requirements
of Regulations section 1.402(f)-1, Q/A-2. The electronic
section 402(f) notice must meet the requirements for
using electronic media in Regulations section 1.401(a)-21.
The notice must explain the rollover rules, the special
tax treatment for certain lump-sum distributions, the direct
rollover option (and any default procedures), the
mandatory 20% withholding rules, and an explanation of
how distributions from the plan to which the rollover is
made may have different restrictions and tax
consequences than the plan from which the rollover is
made.
For periodic payments that are eligible rollover
distributions, you must provide the notice before the first
payment and at least once a year as long as the payments
continue. For section 403(b) plans, the payer must
provide an explanation of the direct rollover option within
the time period described earlier or some other
reasonable period of time.

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that is in part taxable, file a separate Form 1099-R to
report the taxable amount. See Section 1035 exchange,
earlier.

Notice 2009-68, 2009-39 I.R.B. 423, available at
www.irs.gov/irb/2009-39_IRB/ar14.html, modified by
Notice 2014-74, 2014-50 I.R.B. 937, available at
www.irs.gov/irb/2014-50_IRB/ar09.html, contains two
safe harbor explanations that may be provided to
recipients of eligible rollover distributions from an
employer plan in order to satisfy section 402(f).

SIMPLE IRAs. Do not report a trustee-to-trustee transfer
from one SIMPLE IRA to another SIMPLE IRA. However,
you must report as a taxable distribution in boxes 1 and 2a
a trustee-to-trustee transfer from a SIMPLE IRA to an IRA
that is not a SIMPLE IRA during the 2-year period
beginning on the day contributions are first deposited in
the individual's SIMPLE IRA by the employer. Use Code S
in box 7 if appropriate.

Involuntary distributions. For involuntary distributions
paid to an IRA in a direct rollover (automatic rollover), you
may satisfy the notification requirements of section 401(a)
(31)(B)(i) either separately or as a part of the section
402(f) notice. The notification must be in writing and may
be sent using electronic media in accordance with Q/A-5
of Regulations section 1.402(f)-1. Also see Notice 2005-5,
Q/A-15.

Transfer of an IRA to spouse. If you transfer or
re-designate an interest from one spouse's IRA to an IRA
for the other spouse under a divorce or separation
instrument, the transfer or re-designation as provided
under section 408(d)(6) is tax free. Do not report such a
transfer on Form 1099-R.

Transfers

Generally, do not report a transfer between trustees or
issuers that involves no payment or distribution of funds to
the participant, including a trustee-to-trustee transfer from
one IRA to another IRA, valid transfers from one section
403(b) plan in accordance with paragraphs 1 through 3 of
Regulations section 1.403(b)-10(b), or for the purchase of
permissive service credit under section 403(b)(13) or
section 457(e)(17) in accordance with paragraph 4 of
Regulations section 1.403(b)-10(b) and Regulations
section 1.457-10(b)(8). However, you must report:
Recharacterized IRA contributions;
Roth IRA conversions;
Direct rollovers from qualified plans, section 403(b)
plans, or governmental section 457(b) plans, including
any direct rollovers from such plans that are IRRs or are
qualified rollover contributions described in section
408A(e); and
Direct payments from IRAs to accepting employer
plans.

Corrective Distributions

You must report on Form 1099-R corrective distributions
of excess deferrals, excess contributions and excess
aggregate contributions under section 401(a) plans,
section 401(k) cash or deferred arrangements, section
403(a) annuity plans, section 403(b) salary reduction
agreements, and salary reduction simplified employee
pensions (SARSEPs) under section 408(k)(6). Excess
contributions that are recharacterized under a section
401(k) plan are treated as distributed. Corrective
distributions must include earnings through the end of the
year in which the excess arose. These distributions are
reportable on Form 1099-R and are generally taxable in
the year of the distribution (except for excess deferrals
under section 402(g)). Enter Code 8 or P in box 7 (with
Code B, if applicable) to designate the distribution and the
year it is taxable.
Use a separate Form 1099-R to report a corrective
distribution from a designated Roth account.

IRA recharacterizations. You must report each
recharacterization of an IRA contribution. If a participant
makes a contribution to an IRA (first IRA) for a year, the
participant may choose to recharacterize the contribution
by transferring, in a trustee-to-trustee transfer, any part of
the contribution (plus earnings) to another IRA (second
IRA). The contribution is treated as made to the second
IRA (recharacterization). A recharacterization may be
made with the same trustee or with another trustee. The
trustee of the first IRA must report the recharacterization
as a distribution on Form 1099-R and the contribution to
the first IRA and its character on Form 5498.
Enter the fair market value (FMV) of the amount
recharacterized in box 1, 0 (zero) in box 2a, and Code R
in box 7 if reporting a recharacterization of a prior-year
(2015) contribution or Code N if reporting a
recharacterization of a contribution in the same year
(2016). It is not necessary to check the IRA/SEP/SIMPLE
checkbox. For more information on how to report, see
Notice 2000-30 on page 1266 of Internal Revenue Bulletin
2000-25 at www.irs.gov/pub/irs-irbs/irb00-25.pdf.

The total amount of the elective deferral is
reported in box 12 of Form W-2. See the
Instructions for Forms W-2 and W-3 for more
information.

TIP

For more information about reporting corrective
distributions, see: the Guide to Distribution Codes, later;
Notice 89-32, 1989-1 C.B. 671; Notice 88-33, 1988-1 C.B.
513; Notice 87-77, 1987-2 C.B. 385; and the Regulations
under sections 401(k), 401(m), 402(g), and 457.
Excess deferrals. Excess deferrals under section 402(g)
can occur in section 401(k) plans, section 403(b) plans, or
SARSEPs. If distributed by April 15 of the year following
the year of deferral, the excess is taxable to the
participant in the year of deferral (other than designated
Roth contributions), but the earnings are taxable in the
year distributed. Except for a SARSEP, if the distribution
occurs after April 15, the excess is taxable in the year of
deferral and the year distributed. The earnings are taxable
in the year distributed. For a SARSEP, excess deferrals
not withdrawn by April 15 are considered regular IRA
contributions subject to the IRA contribution limits.
Corrective distributions of excess deferrals are not subject
to federal income tax withholding or social security and

Section 1035 exchange. You may have to report
exchanges of insurance contracts, including an exchange
under section 1035, under which any designated
distribution may be made. For a section 1035 exchange
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Instructions for Forms 1099-R and 5498 (2016)

You may report the distribution of elective deferrals
(other than designated Roth contributions) and employee
contributions (and earnings attributable to such elective
deferrals and employee contributions) on the same Form
1099-R. However, if you made other distributions during
the year, report them on a separate Form 1099-R.
Because the distribution of elective deferrals (other than
designated Roth contributions) is fully taxable in the year
distributed (no part of the distribution is a return of the
investment in the contract), report the total amount of the
distribution in boxes 1 and 2a. Leave box 5 blank, and
enter Code E in box 7. For a return of employee
contributions (or designated Roth contributions) plus
earnings, enter the gross distribution in box 1, the
earnings attributable to the employee contributions (or
designated Roth contributions) being returned in box 2a,
and the employee contributions (or designated Roth
contributions) being returned in box 5. Enter Code E in
box 7. For more information, see Rev. Proc. 92-93,
1992-2 C.B. 505.

Medicare taxes. For losses on excess deferrals, see
Losses below. See Regulations section 1.457-4(e) for
special rules relating to excess deferrals under
governmental section 457(b) plans.
Excess contributions. Excess contributions can occur
in a section 401(k) plan or a SARSEP. All distributions of
the excess contributions plus earnings (other than
designated Roth contributions), including recharacterized
excess contributions, are taxable to the participant in the
year of distribution. Report the gross distribution in box 1
of Form 1099-R. In box 2a, enter the excess contribution
and earnings distributed less any designated Roth
contributions. For a SARSEP, the employer must notify
the participant by March 15 of the year after the year the
excess contribution was made that the participant must
withdraw the excess and earnings. All distributions from a
SARSEP are taxable in the year of distribution. An excess
contribution not withdrawn by April 15 of the year after the
year of notification is considered a regular IRA
contribution subject to the IRA contribution limits.

!

Similar rules apply to other corrective distributions
under EPCRS. Also, special Form 1099-R reporting is
available for certain plan loan failures. See section 6.07 of
Rev. Proc. 2013-12 for details.

Regulations have not been updated for
SARSEPs.

CAUTION

Excess aggregate contributions. Excess aggregate
contributions under section 401(m) can occur in section
401(a), section 401(k), section 403(a), and section 403(b)
plans. A corrective distribution of excess aggregate
contributions plus earnings is taxable to the participant in
the year the distribution was made. Report the gross
distribution in box 1 of Form 1099-R. In box 2a, enter the
excess and earnings distributed less any after-tax
contributions.

If excess employer contributions (other than elective
deferrals), and the earnings on them, under SEP,
SARSEP, or SIMPLE IRA plans are returned to an
employer (with the participant's consent), enter the gross
distribution (excess and earnings) in box 1 and 0 (zero) in
box 2a. Enter Code E in box 7.

Failing the ADP or ACP Test After a Total
Distribution

Losses. If a corrective distribution of an excess deferral
is made in a year after the year of deferral and a net loss
has been allocated to the excess deferral, report the
corrective distribution amount in boxes 1 and 2a of Form
1099-R for the year of the distribution with the appropriate
distribution code in box 7. If the excess deferrals consist
of designated Roth contributions, report the corrective
distribution amount in box 1, 0 (zero) in box 2a, and the
appropriate distribution code in box 7. However,
taxpayers must include the total amount of the excess
deferral (unadjusted for loss) in income in the year of
deferral, and they may report a loss on the tax return for
the year the corrective distribution is made.

If you make a total distribution in 2016 and file a Form
1099-R with the IRS and then discover in 2017 that the
plan failed either the section 401(k)(3) actual deferral
percentage (ADP) test for 2016 and you compute excess
contributions or the section 401(m)(2) actual contribution
percentage (ACP) test and you compute excess
aggregate contributions, you must recharacterize part of
the total distribution as excess contributions or excess
aggregate contributions. First, file a CORRECTED Form
1099-R for 2016 for the correct amount of the total
distribution (not including the amount recharacterized as
excess contributions or excess aggregate contributions).
Second, file a new Form 1099-R for 2016 for the excess
contributions or excess aggregate contributions and
allocable earnings.

Distributions Under Employee Plans
Compliance Resolution System (EPCRS)

To avoid a late filing penalty if the new Form 1099-R is
filed after the due date, enter in the bottom margin of Form
1096, Annual Summary and Transmittal of U.S.
Information Returns, the words “Filed To Correct Excess
Contributions.”

The procedure for correcting excess annual additions
under section 415 is explained in the latest EPCRS
revenue procedure in section 6.06 of Rev. Proc. 2013-12,
2013-4 I.R.B. 313, available at www.irs.gov/irb/
2013-04_IRB/ar06.html.

You must also issue copies of the Forms 1099-R to the
plan participant with an explanation of why these new
forms are being issued. ADP and ACP test corrective
distributions are exempt from the 10% early distribution
tax under section 72(t).

Distributions to correct a section 415 failure are not
eligible rollover distributions although they are subject to
federal income tax withholding under section 3405. They
are not subject to social security, Medicare, or Federal
Unemployment Tax Act (FUTA) taxes. In addition, such
distributions are not subject to the 10% early distribution
tax under section 72(t).
Instructions for Forms 1099-R and 5498 (2016)

Loans Treated as Distributions

A loan from a qualified plan under section 401(a) or
403(a), from a section 403(b) plan, or from a plan,
-7-

you would any other actual distribution. Do not enter Code
L in box 7.

whether or not qualified, that is maintained by the United
States, a state or political subdivision thereof, or any
agency or instrumentality thereof, made to a participant or
beneficiary is not treated as a distribution from the plan if
the loan satisfies the following requirements.
1. The loan is evidenced by an enforceable
agreement.
2. The agreement specifies that the loan must be
repaid within 5 years, except for a principal residence.
3. The loan must be repaid in substantially level
installments (at least quarterly).
4. The loan amount does not exceed the limits in
section 72(p)(2)(A) (maximum limit is equal to the lesser
of 50% of the vested account balance or $50,000).

Permissible Withdrawals Under Section 414(w)

For permissible withdrawals from an eligible automatic
contribution arrangement (EACA) under section 414(w):
The distribution (except to the extent the distribution
consists of designated Roth contributions) is included in
the employee's gross income in the year distributed;
Report principal and earnings in boxes 1 and 2a
except, in the case of a distribution from a designated
Roth account, report only earnings in box 2a;
The distribution is not subject to the 10% additional tax
under section 72(t), indicated by reporting Code 2 in
box 7; and
The distribution must be elected by the employee no
later than 90 days after the first default elective
contribution under the EACA, as specified in Regulations
section 1.414(w)-1(c)(2).

Certain exceptions, cure periods, and suspension of
the repayment schedule may apply.
The loan agreement must specify the amount of the
loan, the term of the loan, and the repayment schedule.
The agreement may include more than one document.

If the distribution is from a designated Roth account,
enter Code B as well as Code 2 in box 7.

If a loan fails to satisfy (1), (2), or (3), the balance of the
loan is a deemed distribution. The distribution may occur
at the time the loan is made or later if the loan is not repaid
in accordance with the repayment schedule.

Corrected Form 1099-R

If you filed a Form 1099-R with the IRS and later discover
that there is an error on it, you must correct it as soon as
possible. For example, if you transmit a direct rollover and
file a Form 1099-R with the IRS reporting that none of the
direct rollover is taxable by entering 0 (zero) in box 2a,
and you then discover that part of the direct rollover
consists of RMDs under section 401(a)(9), you must file a
corrected Form 1099-R reporting the eligible rollover
distribution as the direct rollover and file a new Form
1099-R reporting the RMD as if it had been distributed to
the participant. See part H in the 2016 General
Instructions for Certain Information Returns, or Pub. 1220,
if filing electronically.

If a loan fails to satisfy (4) at the time the loan is made,
the amount that exceeds the amount permitted to be
loaned is a deemed distribution.
Deemed distribution. If a loan is treated as a deemed
distribution, it is reportable on Form 1099-R using the
normal taxation rules of section 72, including tax basis
rules. The distribution also may be subject to the 10%
early distribution tax under section 72(t). It is not eligible to
be rolled over to an eligible retirement plan nor is it eligible
for the 10-year tax option. On Form 1099-R, complete the
appropriate boxes, including boxes 1 and 2a, and enter
Code L in box 7. Also, enter Code 1 or Code B, if
applicable.
Interest that accrues after the deemed distribution of a
loan is not an additional loan, and, therefore, is not
reportable on Form 1099-R.
Loans that are treated as deemed distributions or that
are actual distributions are subject to federal income tax
withholding. If such a distribution occurs after the loan is
made, you must withhold only if you distributed cash or
property (other than employer securities) at the time of the
deemed or actual distribution. See section 72(p), section
72(e)(4)(A), and Regulations section 1.72(p)-1.

Filer

The payer, trustee, or plan administrator must file Form
1099-R using the same name and employer identification
number (EIN) used to deposit any tax withheld and to file
Form 945, Annual Return of Withheld Federal
Income Tax.

Beneficiaries

If you make a distribution to a beneficiary, trust, or estate,
prepare Form 1099-R using the name and TIN of the
beneficiary, trust, or estate, not that of the decedent. If
there are multiple beneficiaries, report on each Form
1099-R only the amount paid to the beneficiary whose
name appears on the Form 1099-R, and enter the
percentage in box 9a, if applicable.

Subsequent repayments. If a participant makes any
cash repayments on a loan that was reported on Form
1099-R as a deemed distribution, the repayments
increase the participant's tax basis in the plan as if the
repayments were after-tax contributions. However, such
repayments are not treated as after-tax contributions for
purposes of section 401(m) or 415(c)(2)(B).
For a deemed distribution that was reported on Form
1099-R but was not repaid, the deemed distribution does
not increase the participant's basis.
If a participant's accrued benefit is reduced (offset) to
repay a loan, the amount of the account balance that is
offset against the loan is an actual distribution. Report it as

Disclaimers. A beneficiary may make a qualified
disclaimer of all or some of an IRA account balance if the
disclaimed amount and income are paid to a new
beneficiary or segregated in a separate account. A
qualified disclaimer may be made after the beneficiary has
previously received the RMD for the year of the
decedent's death. For more information, see Rev. Rul.
2005-36, 2005-26 I.R.B. 1368, available at www.irs.gov/
irb/2005-26_IRB/ar11.html.
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Instructions for Forms 1099-R and 5498 (2016)

Alternate Payee Under a Qualified Domestic
Relations Order (QDRO)

account for chapter 4 purposes as described in
Regulations section 1.1471-4(d)(2)(iii)(A).

Distributions to an alternate payee who is a spouse or
former spouse of the employee under a QDRO are
reportable on Form 1099-R using the name and TIN of the
alternate payee. If the alternate payee under a QDRO is a
nonspouse, enter the name and TIN of the employee.
However, this rule does not apply to IRAs; see Transfer of
an IRA to spouse, earlier.

Account Number

The account number is required if you have multiple
accounts for a recipient for whom you are filing more than
one Form 1099-R.

The account number is also required if you check the
“FATCA filing requirement” box. See FATCA Filing
Requirement Check Box, earlier.

Nonresident Aliens

Additionally, the IRS encourages you to designate an
account number for all Forms 1099-R that you file. See
part L in the 2016 General Instructions for Certain
Information Returns.

If income tax is withheld under section 3405 on any
distribution to a nonresident alien, report the distribution
and withholding on Form 1099-R. Also file Form 945 to
report the withholding. See the Presumption Rules in part
S of the 2016 General Instructions for Certain
Information Returns.

Box 1. Gross Distribution

Enter the total amount of the distribution before income
tax or other deductions were withheld. Include direct
rollovers, IRA direct payments to accepting employer
plans, premiums paid by a trustee or custodian for the
cost of current life or other insurance protection, including
a recharacterization and a Roth IRA conversion. Also
include in this box distributions to plan participants from
governmental section 457(b) plans. However, in the case
of a distribution by a trust representing certificates of
deposit (CDs) redeemed early, report the net amount
distributed. Also, see Box 6, later.

However, any payments to a nonresident alien from
any trust under section 401(a), any annuity plan under
section 403(a), any annuity, custodial account, or
retirement income account under section 403(b), or any
IRA account under section 408(a) or (b) are subject to
withholding under section 1441, unless there is an
exception under a tax treaty. Report the distribution and
withholding on Form 1042, Annual Withholding Tax
Return for U.S. Source Income of Foreign Persons, and
Form 1042-S, Foreign Person's U.S. Source Income
Subject to Withholding.

Include in this box the value of U.S. Savings Bonds
distributed from a plan. Enter the appropriate taxable
amount in box 2a. Furnish a statement to the plan
participant showing the value of each bond at the time of
distribution. This will provide him or her with the
information necessary to figure the interest income on
each bond when it is redeemed.

For guidance regarding covered expatriates, see
Notice 2009-85, 2009-45 I.R.B. 598, available at
www.irs.gov/irb/2009-45_IRB/ar10.html.

Statements to Recipients

If you are required to file Form 1099-R, you must furnish a
statement to the recipient. For more information about the
requirement to furnish a statement to each recipient, see
part M in the 2016 General Instructions for Certain
Information Returns.

Include in box 1 amounts distributed from a qualified
retirement plan for which the recipient elects to pay health
insurance premiums under a cafeteria plan or that are
paid directly to reimburse medical care expenses incurred
by the recipient (see Rev. Rul. 2003-62 on page 1034 of
Internal Revenue Bulletin 2003-25 at www.irs.gov/pub/irsirbs/irb03-25.pdf). Also include this amount in box 2a.

Truncating recipient's identification number on
payee statements. Pursuant to Treasury Regulations
section 301.6109-4, all filers of Form 1099-R may truncate
a recipient’s identification number (social security number
(SSN), individual taxpayer identification number (ITIN),
adoption taxpayer identification number (ATIN), or
employer identification number (EIN)) on payee
statements. Truncation is not allowed on any documents
the filer files with the IRS. See part J in the 2016 General
Instructions for Certain Information Returns, for more
information.

TIP

Include in box 1 charges or payments for qualified
long-term care insurance contracts under combined
arrangements. Enter Code W in box 7.
In addition to reporting distributions to beneficiaries of
deceased employees, report here any death benefit
payments made by employers that are not made as part
of a pension, profit-sharing, or retirement plan. Also enter
these amounts in box 2a; enter Code 4 in box 7.

Do not enter a negative amount in any box on
Form 1099-R.

Do not report accelerated death benefits on Form
1099-R. Report them on Form 1099-LTC,
CAUTION
Long-Term Care and Accelerated
Death Benefits.

!

FATCA Filing Requirement Check Box

Check the box if you are an FFI reporting a cash value
insurance contract or annuity contract that is a U.S.
account in a manner similar to that required under section
6047(d). See Regulations section 1.1471-4(d)(5)(i)(B) for
this election. In addition, check the box if you are a U.S.
payer that is reporting on Form 1099-R as part of
satisfying your requirement to report with respect to a U.S.
Instructions for Forms 1099-R and 5498 (2016)

For section 1035 exchanges that are reportable on
Form 1099-R, enter the total value of the contract in box 1,
0 (zero) in box 2a, the total premiums paid in box 5, and
Code 6 in box 7.
Designated Roth account distributions. If you are
making a distribution from a designated Roth account,
-9-

enter the gross distribution in box 1, the taxable portion of
the distribution in box 2a, the basis included in the
distributed amount in box 5, any amount allocable to an
IRR made within the previous 5 years (unless an
exception to section 72(t) applies) in box 10, and the first
year of the 5-taxable-year period for determining qualified
distributions in box 11. Also, enter the applicable code(s)
in box 7.
Employer securities and other property. If you
distribute employer securities or other property, include in
box 1 the FMV of the securities or other property on the
date of distribution. If there is a loss, see Losses, later.
If you are distributing worthless property only, you are
not required to file Form 1099-R. However, you may file
and enter 0 (zero) in boxes 1 and 2a and any after-tax
employee contributions or designated Roth contributions
in box 5.
Charitable gift annuities. If cash or capital gain property
is donated in exchange for a charitable gift annuity, report
the total amount distributed during the year in box 1. See
Charitable gift annuities under Box 3, later.
FFIs reporting in a manner similar to section 6047(d).
If you are a participating FFI electing to report with respect
to a cash value insurance contract or annuity contract that
is a U.S. account held by a specified U.S. person in a
manner similar to section 6047(d), include in box 1 any
amount paid under the contract during the reporting
period (that is, the calendar year or the year ending on the
most recent contract anniversary date).
Do not report the account balance or value (as of
the end of the reporting period) in box 1.
CAUTION
Participating FFIs reporting in a manner similar to
section 6047(d) should check the Recent Developments
section for Form 1099-R at www.irs.gov/form1099r before
filing for 2016.

!

Box 2a. Taxable Amount
When determining the taxable amount to be
entered in box 2a, do not reduce the taxable
CAUTION
amount by any portion of the $3,000 exclusion for
which the participant may be eligible as a payment of
qualified health and long-term care insurance premiums
for retired public safety officers under section 402(l).

!

Generally, you must enter the taxable amount in box 2a.
However, if you are unable to reasonably obtain the data
needed to compute the taxable amount, leave this box
blank. Do not enter excludable or tax-deferred amounts
reportable in boxes 5, 6, and 8. Enter 0 (zero) in box 2a
for:
A direct rollover (other than an IRR) from a qualified
plan, a section 403(b) plan, or a governmental section
457(b) plan to another such plan or to a traditional IRA;
A direct rollover from a designated Roth account to a
Roth IRA;
A traditional, SEP, or SIMPLE IRA directly transferred
to an accepting employer plan;
An IRA recharacterization;
A nontaxable section 1035 exchange of life insurance,
annuity, endowment or long-term care insurance
contracts; or

A nontaxable charge or payment, for the purchase of a
qualified long-term care insurance contract, against the
cash value of an annuity contract or the cash surrender
value of a life insurance contract.
Annuity starting date in 1998 or later. If you made
annuity payments from a qualified plan under section
401(a), 403(a), or 403(b) and the annuity starting date is in
1998 or later, you must use the simplified method under
section 72(d)(1) to figure the taxable amount. Under this
method, the expected number of payments you use to
figure the taxable amount depends on whether the
payments are based on the life of one or more than one
person. See Notice 98-2, 1998-1 C.B. 266, and Pub. 575,
Pension and Annuity Income, to help you figure the
taxable amount to enter in box 2a.
Annuity starting date after November 18, 1996, and
before 1998. Under the simplified method for figuring the
taxable amount, the expected number of payments is
based only on the primary annuitant's age on the annuity
starting date. See Notice 98-2.
Annuity starting date before November 19, 1996. If
you properly used the rules in effect before November 19,
1996, for annuities that started before that date, continue
to report using those rules. No changes are necessary.
Corrective distributions. Enter in box 2a the amount of
excess deferrals, excess contributions, or excess
aggregate contributions (other than employee
contributions or designated Roth contributions). See
Corrective Distributions, earlier.
Cost of current life insurance protection. Include
current life insurance protection costs (net premium costs)
that were reported in box 1. However, do not report these
costs and a distribution on the same Form 1099-R. Use a
separate Form 1099-R for each. For the cost of current life
insurance protection, enter Code 9 in box 7.
DVECs. Include DVEC distributions in this box. Also see
Deductible Voluntary Employee Contributions (DVECs),
earlier.
Designated Roth account. Generally, a distribution
from a designated Roth account that is not a qualified
distribution is taxable to the recipient under section 402 in
the case of a plan qualified under section 401(a), under
section 403(b)(1) in the case of a section 403(b) plan, and
under section 457(a)(1)(A) in the case of a governmental
section 457(b) plan. For purposes of section 72,
designated Roth contributions are treated as employer
contributions as described in section 72(f)(1) (that is, as
includible in the participant's gross income).
Examples. Participant A received a nonqualified
distribution of $5,000 from the participant's designated
Roth account. Immediately before the distribution, the
participant's account balance was $10,000, consisting of
$9,400 of designated Roth contributions and $600 of
earnings. The taxable amount of the $5,000 distribution is
$300 ($600/$10,000 x $5,000). The nontaxable portion of
the distribution is $4,700 ($9,400/$10,000 x $5,000). The
issuer would report on Form 1099-R:
Box 1, $5,000 as the gross distribution;
Box 2a, $300 as the taxable amount;
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Instructions for Forms 1099-R and 5498 (2016)

FMV of an individual retirement annuity issued by a
company regularly engaged in the selling of contracts
depends on the timing of the conversion as outlined in Q/
A-14 of Regulations section 1.408A-4.
For a Roth IRA conversion, use Code 2 in box 7 if the
participant is under age 591 2 or Code 7 if the participant is
at least age 591 2. Also check the IRA/SEP/SIMPLE box in
box 7.

Box 4, $60 ($300 x 20%) as the withholding on the
earnings portion of the distribution;
Box 5, $4,700 as the designated Roth contribution
basis (nontaxable amount);
Box 7, Code B; and
The first year of the 5-taxable-year period in box 11.
Using the same facts as in the example above, except
that the distribution was a direct rollover to a Roth IRA, the
issuer would report on Form 1099-R:
Box 1, $5,000 as the gross distribution;
Box 2a, 0 (zero) as the taxable amount;
Box 4, no entry;
Box 5, $4,700 as the designated Roth contribution
basis (nontaxable amount);
Box 7, Code H; and
The first year of the 5-taxable-year period in box 11.

Traditional, SEP, or SIMPLE IRA. Generally, you are
not required to compute the taxable amount of a
traditional, SEP, or SIMPLE IRA nor designate whether
any part of a distribution is a return of basis attributable to
nondeductible contributions. Therefore, except as
provided below or elsewhere in these instructions, report
the total amount distributed from a traditional, SEP, or
SIMPLE IRA in box 2a. This will be the same amount
reported in box 1. Check the “Taxable amount not
determined” box in box 2b.
For a distribution by a trust representing CDs redeemed
early, report the net amount distributed. Do not include
any amount paid for IRA insurance protection in
this box.
For a distribution of contributions plus earnings from an
IRA before the due date of the return under section 408(d)
(4), report the gross distribution in box 1, only the earnings
in box 2a, and enter Code 8 or P, whichever is applicable,
in box 7. Enter Code 1 or 4 also, if applicable.
For a distribution of excess contributions without
earnings after the due date of the individual's return under
section 408(d)(5), leave box 2a blank, and check the
“Taxable amount not determined” box in box 2b. Use
Code 1 or 7 in box 7 depending on the age of the
participant.
For an amount in a traditional IRA or a SEP IRA paid
directly to an accepting employer plan, or an amount in a
SIMPLE IRA paid directly to an accepting employer plan
after the 2-year period (see section 72(t)(6)), enter the
gross amount in box 1, 0 (zero) in box 2a, and Code G in
box 7.

Losses. If a distribution is a loss, do not enter a negative
amount in this box. For example, if an employee's 401(k)
account balance, consisting solely of stock, is distributed
but the value is less than the employee's remaining
after-tax contributions or designated Roth contributions,
enter the value of the stock in box 1, leave box 2a blank,
and enter the employee's contributions or designated
Roth contributions in box 5.
For a plan with no after-tax contributions or designated
Roth contributions, even though the value of the account
may have decreased, there is no loss for reporting
purposes. Therefore, if there are no employer securities
distributed, show the actual cash and/or FMV of property
distributed in boxes 1 and 2a, and make no entry in box 5.
If only employer securities are distributed, show the FMV
of the securities in boxes 1 and 2a and make no entry in
box 5 or 6. If both employer securities and cash or other
property are distributed, show the actual cash and/or FMV
of the property (including employer securities) distributed
in box 1, the gross less any NUA on employer securities in
box 2a, no entry in box 5, and any NUA in box 6.
Roth IRA. For a distribution from a Roth IRA, report the
total distribution in box 1 and leave box 2a blank except in
the case of an IRA revocation or account closure and a
recharacterization, earlier. Use Code J, Q, or T as
appropriate in box 7. Use Code 8 or P, if applicable, in
box 7 with Code J. Do not combine Code Q or T with any
other codes.
However, for the distribution of excess Roth IRA
contributions, report the gross distribution in box 1 and
only the earnings in box 2a. Enter Code J and Code 8 or P
in box 7.

Box 2b. Taxable Amount Not Determined

Enter an “X” in this box if you are unable to reasonably
obtain the data needed to compute the taxable amount.
In addition, enter an “X” in this box if you are an FFI
reporting in box 1 to satisfy your chapter 4 reporting
requirement under the election described in Regulations
section 1.1471-4(d)(5)(i)(B).

Roth IRA conversions. Report the total amount
converted from a traditional IRA, SEP IRA, or SIMPLE IRA
to a Roth IRA in box 2a. Check the “Taxable amount not
determined” box in box 2b. A conversion is considered a
distribution and must be reported even if it is with the
same trustee and even if the conversion is done by a
trustee-to-trustee transfer. When an individual retirement
annuity described in section 408(b) is converted to a Roth
IRA, the amount that is treated as distributed is the FMV of
the annuity contract on the date the annuity contract is
converted. This rule also applies when a traditional IRA
holds an annuity contract as an account asset and the
traditional IRA is converted to a Roth IRA. Determining the
Instructions for Forms 1099-R and 5498 (2016)

If you check this box, leave box 2a blank; but see
Traditional, SEP, or SIMPLE IRA on this page. Except for
IRAs, make every effort to compute the
taxable amount.

Box 2b. Total Distribution

Enter an “X” in this box only if the payment shown in box 1
is a total distribution. A total distribution is one or more
distributions within 1 tax year in which the entire balance
of the account is distributed. If periodic or installment
payments are made, mark this box in the year the final
payment is made.

-11-

Box 3. Capital Gain (Included in Box 2a)

Method for Computing Amount Eligible for
Capital Gain Election (See Box 3.)

If any amount is taxable as a capital gain, report it in
box 3.

Step 1. Total Taxable Amount

Charitable gift annuities. Report in box 3 any amount
from a charitable gift annuity that is taxable as a capital
gain. Report in box 1 the total amount distributed during
the year. Report in box 2a the taxable amount. Advise the
annuity recipient of any amount in box 3 subject to the
28% rate gain for collectibles and any unrecaptured
section 1250 gain. Report in box 5 any nontaxable
amount. Enter Code F in box 7. See Regulations section
1.1011-2(c), Example 8.
Special rule for participants born before January 2,
1936 (or their beneficiaries). For lump-sum
distributions from qualified plans only, enter the amount in
box 2a eligible for the capital gain election under section
1122(h)(3) of the Tax Reform Act of 1986 and section
641(f)(3) of the Economic Growth and Tax Relief
Reconciliation Act of 2001. Enter the full amount eligible
for the capital gain election. You should not complete this
box for a direct rollover.
To compute the months of an employee's active
participation before 1974, count as 12 months any part of
a calendar year in which an employee actively
participated under the plan; for active participation after
1973, count as 1 month any part of a month in which the
employee actively participated under the plan. See the
Example below.
Active participation begins with the first month in which
an employee became a participant under the plan and
ends with the earliest of:
The month in which the employee received a lump-sum
distribution under the plan;
For an employee, other than a self-employed person or
owner-employee, the month in which the employee
separates from service;
The month in which the employee dies; or
For a self-employed person or owner-employee, the
first month in which the employee becomes disabled
within the meaning of section 72(m)(7).

A. Total distribution
B. Less:
1. Current actuarial value of any annuity
2. Employee contributions or designated Roth
contributions (minus any amounts previously
distributed that were not includible in the
employee's gross income)
3. Net unrealized appreciation in the value of
any employer securities that was a part of the
lump-sum distribution.

XXXXX
XXXX

XXXX
XXXX

C. Total of lines 1 through 3

XXXXX

D. Total taxable amount. Subtract line C from
line A.

XXXXX

Step 2. Capital Gain

Total taxable
amount
Line D

X

Months of active
participation before 1974
____________________ = Capital gain
_
Total months of active
participation

Box 4. Federal Income Tax Withheld

Enter any federal income tax withheld. This withholding
under section 3405 is subject to deposit rules and the
withholding tax return is Form 945. Backup withholding
does not apply. See Pub. 15-A, Employer's Supplemental
Tax Guide, and the Instructions for Form 945 for more
withholding information.
Even though you may be using Code 1 in box 7 to
designate an early distribution subject to the 10%
additional tax specified in section 72(q), (t), or (v), you are
not required to withhold that tax.
The amount withheld cannot be more than the
sum of the cash and the FMV of property
(excluding employer securities) received in the
distribution. If a distribution consists solely of employer
securities and cash ($200 or less) in lieu of fractional
shares, no withholding is required.

TIP

To determine your withholding requirements for any
designated distribution under section 3405, you must first
determine whether the distribution is an eligible rollover
distribution. See Direct Rollovers, earlier, for a discussion
of eligible rollover distributions. If the distribution is not an
eligible rollover distribution, the rules for periodic
payments or nonperiodic distributions apply. For purposes
of withholding, distributions from any IRA are not eligible
rollover distributions.
Eligible rollover distribution; 20% withholding. If an
eligible rollover distribution is paid directly to an eligible
retirement plan in a direct rollover, do not withhold federal
income tax. If any part of an eligible rollover distribution is
not a direct rollover, you must withhold 20% of the part
-12-

Instructions for Forms 1099-R and 5498 (2016)

that is paid to the recipient and includible in gross income.
This includes the earnings portion of any nonqualified
designated Roth account distribution that is not directly
rolled over. The recipient cannot claim exemption from the
20% withholding but may ask to have additional amounts
withheld on Form W-4P, Withholding Certificate for
Pension or Annuity Payments. If the recipient is not asking
that additional amounts be withheld, Form W-4P is not
required for an eligible rollover distribution because 20%
withholding is mandatory.
Employer securities and plan loan offset amounts that
are part of an eligible rollover distribution must be
included in the amount multiplied by 20%. However, the
actual amount to be withheld cannot be more than the
sum of the cash and the FMV of property (excluding
employer securities and plan loan offset amounts). For
example, if the only part of an eligible rollover distribution
that is not a direct rollover is employer securities or a plan
loan offset amount, no withholding is required. However,
unless otherwise exempt, any cash that is paid in the
distribution must be used to satisfy the withholding on the
employer securities or plan loan offset amount.
Depending on the type of plan or arrangement, the
payer or, in some cases, the plan administrator is required
to withhold 20% of eligible rollover distributions from a
qualified plan's distributed annuity and on eligible rollover
distributions from a governmental section 457(b) plan. For
additional information, see section 3405(d) and
Regulations sections 35.3405-1T, A-13; and
31.3405(c)-1, Q/A 4 and 5. For governmental section
457(b) plans only, see Notice 2003-20.
Any NUA excludable from gross income under section
402(e)(4) is not included in the amount of any eligible
rollover distribution that is subject to 20% withholding.
You are not required to withhold 20% of an eligible
rollover distribution that, when aggregated with other
eligible rollover distributions made to one person during
the year, is less than $200.
IRAs. The 20% withholding does not apply to
distributions from any IRA, but withholding does apply to
IRAs under the rules for periodic payments and
nonperiodic distributions. For withholding, assume that
the entire amount of a distribution from an IRA other than
a Roth IRA is taxable (except for the distribution of
contributions under section 408(d)(4), in which only the
earnings are taxable, and section 408(d)(5), as
applicable). Generally, Roth IRA distributions are not
subject to withholding except on the earnings portion of
excess contributions distributed under section 408(d)(4).
An IRA recharacterization is not subject to income tax
withholding.
Periodic payments. For periodic payments that are not
eligible rollover distributions, withhold on the taxable part
as though the periodic payments were wages, based on
the recipient's Form W-4P. The recipient may request
additional withholding on Form W-4P or claim exemption
from withholding. If a recipient does not submit a Form
W-4P, withhold by treating the recipient as married with
three withholding allowances. See Circular E, Employer's
Tax Guide (Pub. 15), for wage withholding tables.

Instructions for Forms 1099-R and 5498 (2016)

TIP

Rather than Form W-4P, military retirees should
give you Form W-4, Employee's Withholding
Allowance Certificate.

Nonperiodic distributions. Withhold 10% of the taxable
part of a nonperiodic distribution that is not an eligible
rollover distribution. In most cases, designated
distributions from any IRA are treated as nonperiodic
distributions subject to withholding at the 10% rate even if
the distributions are paid over a periodic basis. See
Regulations section 35.3405-1T, Q/A F-15. The recipient
may request additional withholding on Form W-4P or
claim exemption from withholding.
Failure to provide TIN. For periodic payments and
nonperiodic distributions, if a payee fails to furnish his or
her correct TIN to you in the manner required, or if the IRS
notifies you before any distribution that the TIN furnished
is incorrect, a payee cannot claim exemption from
withholding. For periodic payments, withhold as if the
payee was single claiming no withholding allowances. For
nonperiodic payments, withhold 10%. Backup withholding
does not apply.

Box 5. Employee Contributions/Designated
Roth Contributions or Insurance Premiums

Enter the employee's contributions, designated Roth
contributions, or insurance premiums that the employee
may recover tax free this year (even if they exceed the
box 1 amount). The entry in box 5 may include any of the
following: (a) designated Roth contributions or
contributions actually made on behalf of the employee
over the years under the plan that were required to be
included in the income of the employee when contributed
(after-tax contributions), (b) contributions made by the
employer but considered to have been contributed by the
employee under section 72(f), (c) the accumulated cost of
premiums paid for life insurance protection taxable to the
employee in previous years and in the current year under
Regulations section 1.72-16 (cost of current life insurance
protection) (only if the life insurance contract itself is
distributed), and (d) premiums paid on commercial
annuities. Do not include any DVECs, elective deferrals,
or any contribution to a retirement plan that was not an
after-tax contribution.
Generally, for qualified plans, section 403(b) plans, and
nonqualified commercial annuities, enter in box 5 the
employee contributions or insurance premiums recovered
tax free during the year based on the method you used to
determine the taxable amount to be entered in box 2a. On
a separate Form 1099-R, include the portion of the
employee's basis that has been distributed from a
designated Roth account. See the Examples in the
instructions for box 2a, earlier.
If periodic payments began before 1993, you are not
required to, but you are encouraged to, report in box 5.
If you made periodic payments from a qualified
plan and the annuity starting date is after
CAUTION
November 18, 1996, you must use the simplified
method to figure the tax-free amount each year. See
Annuity starting date in 1998 or later, earlier.

!

-13-

If a total distribution is made, the total employee
contributions or insurance premiums available to be
recovered tax free must be shown only in box 5. If any
previous distributions were made, any amount recovered
tax free in prior years must not appear in box 5.
If you are unable to reasonably obtain the data
necessary to compute the taxable amount, leave boxes
2a and 5 blank, and check the first box in box 2b.
For more information, see Rev. Proc. 92-86, 1992-2
C.B. 495 and section 72(d).
For reporting charitable gift annuities, see Charitable
gift annuities, earlier.

Box 6. Net Unrealized Appreciation (NUA) in
Employer's Securities

Use this box if a distribution from a qualified plan (except
a qualified distribution from a designated Roth account)
includes securities of the employer corporation (or a
subsidiary or parent corporation) and you can compute
the NUA in the employer's securities. Enter all the NUA in
employer securities if this is a lump-sum distribution. If this
is not a lump-sum distribution, enter only the NUA in
employer securities attributable to employee
contributions. See Regulations section 1.402(a)-1(b) for
the determination of the NUA. Also see Notice 89-25, Q/
A-1, 1989-1 C.B. 662. Include the NUA in box 1 but not in
box 2a except in the case of a direct rollover to a Roth IRA
(see Notice 2009-75, Q/A 1). You do not have to complete
this box for a direct rollover.

Box 7. Distribution Code(s)

Enter an “X” in the IRA/SEP/SIMPLE checkbox if the
distribution is from a traditional IRA, SEP IRA, or SIMPLE
IRA. Do not check the box for a distribution from a Roth
IRA or for an IRA recharacterization.

Enter the appropriate code(s) in box 7. Use the Guide
to Distribution Codes, later, to determine the appropriate
code(s) to enter in box 7 for any amounts reported on
Form 1099-R. Read the codes carefully and enter them
accurately because the IRS uses the codes to help
determine whether the recipient has properly reported the
distribution. If the codes you enter are incorrect, the IRS
may improperly propose changes to the recipient's taxes.
When applicable, enter a numeric and an alpha code.
For example, when using Code P for a traditional IRA
distribution under section 408(d)(4), you must also enter
Code 1, if it applies. For a normal distribution from a
qualified plan that qualifies for the 10-year tax option,
enter Codes 7 and A. For a direct rollover to an IRA or a
qualified plan for the surviving spouse of a deceased
participant, or on behalf of a nonspouse designated
beneficiary, enter Codes 4 and G (Codes 4 and H if from a
designated Roth account to a Roth IRA). If two or more
distribution codes are not valid combinations, you must
file more than one Form 1099-R.
Enter a maximum of two alpha/numeric codes in
box 7. See the Guide to Distribution Codes, later,
CAUTION
for allowable combinations. Only three numeric
combinations are permitted on one Form 1099-R: Codes
8 and 1, 8 and 2, or 8 and 4. If two or more other numeric
codes are applicable, you must file more than one Form

!

1099-R. For example, if part of a distribution is premature
(Code 1) and part is not (Code 7), file one Form 1099-R
for the part to which Code 1 applies and another Form
1099-R for the part to which Code 7 applies. In addition,
for the distribution of excess deferrals, parts of the
distribution may be taxable in 2 different years. File
separate Forms 1099-R using Code 8 or P to indicate the
year the amount is taxable.
Even if the employee/taxpayer is age 591 2 or over, use
Code 1 if a series of substantially equal periodic payments
was modified within 5 years of the date of the first
payment (within the meaning of section 72(q)(3) or (t)(4)),
if you have been reporting distributions in previous years
using Code 2.
For example, Mr. B began receiving payments that
qualified for the exception for part of a series of
substantially equal periodic payments under section 72(t)
(2)(A)(iv) when he was 57. When he was 61, Mr. B
modified the payments. Because the payments were
modified within 5 years, use Code 1 in the year the
payments were modified, even though Mr. B is over 591 2.
If you do not know that the taxpayer meets the
requirements for substantially equal periodic payments
under section 72(t)(2)(A)(iv), use Code 1 to report the
payments.
For further guidance on what makes a series of
substantially equal periodic payments, see Notice
CAUTION
89-25, Q/A-12, as modified by Rev. Rul. 2002-62,
2002-42 I.R.B. 710. Notice 2004-15, 2004-9 I.R.B. 526,
available at www.irs.gov/irb/2004-09_IRB/ar09.html,
allows taxpayers to use one of three methods in Notice
89-25, as modified by Rev. Rul. 2002-62, to determine
whether a distribution from a nonqualified annuity is part
of a series of substantially equal periodic payments under
section 72(q)(2)(D).

!

If part of a distribution is paid in a direct rollover and
part is not, you must file a separate Form 1099-R for each
part showing the appropriate code on each form.
Governmental section 457(b) plan distributions.
Generally, a distribution from a governmental section
457(b) plan is not subject to the 10% additional tax under
section 72(t). However, an early distribution from a
governmental section 457(b) plan of an amount that is
attributable to a rollover from another type of eligible
retirement plan or IRA is subject to the additional tax as if
the distribution were from a plan described in section
401(a). See section 72(t)(9). If the distribution consists
solely of amounts that are not attributable to such a
rollover, enter Code 2 in box 7. If the distribution consists
solely of amounts attributable to such a rollover, then
enter the appropriate code in box 7 as if the distribution
were from a plan described in section 401(a). If the
distribution is made up of amounts from both sources, you
must file separate Forms 1099-R for each part of the
distribution unless Code 2 would be entered on
each form.

Box 8. Other

Enter the current actuarial value of an annuity contract
that is part of a lump-sum distribution. Do not include this
item in boxes 1 and 2a.
-14-

Instructions for Forms 1099-R and 5498 (2016)

To determine the value of an annuity contract, show the
value as an amount equal to the current actuarial value of
the annuity contract, reduced by an amount equal to the
excess of the employee's contributions over the cash and
other property (not including the annuity contract)
distributed.
If an annuity contract is part of a multiple recipient
lump-sum distribution, enter in box 8, along with the
current actuarial value, the percentage of the total annuity
contract each Form 1099-R represents.
Also, enter in box 8 the amount of the reduction in the
investment (but not below 0 (zero)) against the cash value
of an annuity contract or the cash surrender value of a life
insurance contract due to charges or payments for
qualified long-term care insurance contracts.

Box 9a. Your Percentage of Total Distribution

If this is a total distribution and it is made to more than one
person, enter the percentage received by the person
whose name appears on Form 1099-R. You need not
complete this box for any IRA distributions or for a
direct rollover.

Box 9b. Total Employee Contributions

You are not required to enter the total employee
contributions or designated Roth contributions in box 9b.
However, because this information may be helpful to the
recipient, you may choose to report them.
If you choose to report the total employee contributions
or designated Roth contributions, do not include any
amounts recovered tax free in prior years. For a total
distribution, report the total employee contributions or
designated Roth contributions in box 5 rather than in
box 9b.

Instructions for Forms 1099-R and 5498 (2016)

Box 10. Amount Allocable to IRR Within 5 Years
Enter the amount of the distribution allocable to an IRR
made within the 5-year period beginning with the first day
of the year in which the rollover was made. Do not
complete this box if an exception under section 72(t)
applies.

For further guidance on determining amounts allocable
to an IRR, see Notice 2010-84, Q/A-13.

Box 11. 1st Year of Desig. Roth Contrib.

Enter the first year of the 5-taxable-year period. This is the
year in which the designated Roth account was first
established by the recipient.

Boxes 12–17. State and Local Information

These boxes and Copies 1 and 2 are provided for your
convenience only and need not be completed for the IRS.
Use the state and local information boxes to report
distributions and taxes for up to two states or localities.
Keep the information for each state or locality separated
by the broken line. If state or local income tax has been
withheld on this distribution, you may enter it in boxes 12
and 15, as appropriate. In box 13, enter the abbreviated
name of the state and the payer's state identification
number. The state number is the payer's identification
number assigned by the individual state. In box 16, enter
the name of the locality. In boxes 14 and 17, you may
enter the amount of the state or local distribution. Copy 1
may be used to provide information to the state or local
tax department. Copy 2 may be used as the recipient's
copy in filing a state or local income tax return.

-15-

Guide to Distribution Codes
Distribution Codes

*Used with code ...(if
applicable)

Explanations

1—Early distribution, no known exception.

Use Code 1 only if the participant has not reached age 591 2, and you do not know 8, B, D, K, L, or P
if any of the exceptions under Code 2, 3, or 4 apply. However, use Code 1 even if
the distribution is made for medical expenses, health insurance premiums,
qualified higher education expenses, a first-time home purchase, or a qualified
reservist distribution under section 72(t)(2)(B), (D), (E), (F), or (G). Code 1 must
also be used even if a taxpayer is 591 2 or older and he or she modifies a series of
substantially equal periodic payments under section 72(q), (t), or (v) prior to the
end of the 5-year period which began with the first payment.

2—Early distribution, exception applies.

Use Code 2 only if the participant has not reached age 591 2 and you know the
distribution is the following.

8, B, D, K, or P

A Roth IRA conversion (an IRA converted to a Roth IRA).
A distribution made from a qualified retirement plan or IRA because of an IRS
levy under section 6331.
A governmental section 457(b) plan distribution that is not subject to the
additional 10% tax. But see Governmental section 457(b) plan distributions,
earlier, for information on distributions that may be subject to the 10% additional
tax.
A distribution from a qualified retirement plan after separation from service in or
after the year the participant has reached age 55.
A distribution from a governmental defined benefit plan to a public safety
employee (as defined in 72(t)(10)(B)) after separation from service, in or after the
year the employee has reached age 50.
A distribution that is part of a series of substantially equal periodic payments as
described in section 72(q), (t), (u), or (v).
A distribution that is a permissible withdrawal under an eligible automatic
contribution arrangement (EACA).
Any other distribution subject to an exception under section 72(q), (t), (u), or (v)
that is not required to be reported using Code 1, 3, or 4.
3—Disability.

For these purposes, see section 72(m)(7).

4—Death.

Use Code 4 regardless of the age of the participant to indicate payment to a
8, A, B, D, G, H, K, L, or P
decedent's beneficiary, including an estate or trust. Also use it for death benefit
payments made by an employer but not made as part of a pension, profit-sharing,
or retirement plan.

5—Prohibited transaction.

Use Code 5 if there was a prohibited transaction involving the IRA account. Code
5 means the account is no longer an IRA.

None

6—Section 1035 exchange.

Use Code 6 to indicate the tax-free exchange of life insurance, annuity, long-term
care insurance, or endowment contracts under section 1035.

W

-16-

D

Instructions for Forms 1099-R and 5498 (2016)

Guide to Distribution Codes
Distribution Codes

*Used with code ...(if
applicable)

Explanations

7—Normal distribution.

Use Code 7: (a) for a normal distribution from a plan, including a traditional IRA,
section 401(k), or section 403(b) plan, if the employee/taxpayer is at least age 59
1
1
2; (b) for a Roth IRA conversion if the participant is at least age 59 2; and (c) to
report a distribution from a life insurance, annuity, or endowment contract and for
reporting income from a failed life insurance contract under sections 7702(g) and
(h). See Rev. Proc. 2008-42, 2008-29 I.R.B. 160, available at www.irs.gov/irb/
2008-29_IRB/ar19.html. Generally, use Code 7 if no other code applies. Do not
use Code 7 for a Roth IRA.
Note: Code 1 must be used even if a taxpayer is 591 2 or older and he or she
modifies a series of substantially equal periodic payments under section 72(q),
(t), or (v) prior to the end of the 5-year period which began with the first payment.

8—Excess contributions plus earnings/excess
deferrals (and/or earnings) taxable in 2016.

Use Code 8 for an IRA distribution under section 408(d)(4), unless Code P
1, 2, 4, B, J, or K
applies. Also use this code for corrective distributions of excess deferrals, excess
contributions, and excess aggregate contributions, unless Code P applies. See
Corrective Distributions, earlier, and IRA Revocation or Account Closure, earlier,
for more information.

9—Cost of current life insurance protection.

Use Code 9 to report premiums paid by a trustee or custodian for current life or
other insurance protection. See the instructions for box 2a, earlier, for more
information.

None

A—May be eligible for 10-year tax option.

Use Code A only for participants born before January 2, 1936, or their
beneficiaries to indicate the distribution may be eligible for the 10-year tax option
method of computing the tax on lump-sum distributions (on Form 4972, Tax on
Lump-Sum Distributions). To determine whether the distribution may be eligible
for the tax option, you need not consider whether the recipient used this method
(or capital gain treatment) in the past.

4 or 7

B—Designated Roth account distribution.

Use Code B for a distribution from a designated Roth account. But use Code E
for a section 415 distribution under EPCRS (see Code E) or Code H for a direct
rollover to a Roth IRA.

1, 2, 4, 7, 8, G, L, P, or U

D—Annuity payments from nonqualified annuities
and distributions from life insurance contracts
that may be subject to tax under section 1411.

Use Code D for a distribution from any plan or arrangement not described in
sections 401(a), 403(a), 403(b), 408, 408A, or 457(b).

1, 2, 3, 4, or 7

E—Distributions under Employee Plans
Compliance Resolution System (EPCRS).

See Distributions Under Employee Plans Compliance Resolution System
(EPCRS), earlier.

None

F—Charitable gift annuity.

See Charitable gift annuities, earlier.

None

G—Direct rollover and direct payment.

Use Code G for a direct rollover from a qualified plan, a section 403(b) plan, or a
governmental section 457(b) plan to an eligible retirement plan (another qualified
plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA). See
Direct Rollovers, earlier. Also use Code G for a direct payment from an IRA to an
accepting employer plan, and for IRRs that are direct rollovers.
Note: Do not use Code G for a direct rollover from a designated Roth account to
a Roth IRA. Use Code H.

4, B, or K

H—Direct rollover of a designated Roth account
distribution to a Roth IRA.

Use Code H for a direct rollover of a distribution from a designated Roth account
to a Roth IRA.

4

J—Early distribution from a Roth IRA.

Use Code J for a distribution from a Roth IRA when Code Q or Code T does not
apply. But use Code 2 for an IRS levy and Code 5 for a prohibited transaction.

8 or P

K—Distribution of traditional IRA assets not
having a readily available FMV.

Use Code K to report distributions of IRA assets not having a readily available
FMV. These assets may include:

1, 2, 4, 7, 8, or G

stock, other ownership interest in a corporation, short- or long-term debt
obligations, not readily tradable on an established securities market;
ownership interest in a limited liability company (LLC), partnership, trust, or
similar entity (unless the interest is traded on an established securities market);
real estate;
option contracts or similar products not offered for trade on an established
option exchange; or
other asset that does not have a readily available FMV.

Instructions for Forms 1099-R and 5498 (2016)

-17-

A, B, D, or K

Guide to Distribution Codes
Distribution Codes

*Used with code ...(if
applicable)

Explanations

L—Loans treated as deemed distributions under
section 72(p).

Do not use Code L to report a loan offset. See Loans Treated as Distributions,
earlier.

1, 4, or B

N—Recharacterized IRA contribution made for
2016.

Use Code N for a recharacterization of an IRA contribution made for 2016 and
recharacterized in 2016 to another type of IRA by a trustee-to-trustee transfer or
with the same trustee.

None

P—Excess contributions plus earnings/excess
deferrals taxable in 2015.

See the explanation for Code 8. The IRS suggests that anyone using Code P for
the refund of an IRA contribution under section 408(d)(4), including excess Roth
IRA contributions, advise payees, at the time the distribution is made, that the
earnings are taxable in the year in which the contributions were made.

1, 2, 4, B, or J

Q—Qualified distribution from a Roth IRA.

Use Code Q for a distribution from a Roth IRA if you know that the participant
meets the 5-year holding period and:

None

The participant has reached age 591 2,
The participant died, or

The participant is disabled.
Note: If any other code, such as 8 or P, applies, use Code J.
R—Recharacterized IRA contribution made for
2015.

Use Code R for a recharacterization of an IRA contribution made for 2015 and
recharacterized in 2016 to another type of IRA by a trustee-to-trustee transfer or
with the same trustee.

None

S—Early distribution from a SIMPLE IRA in the
first 2 years, no known exception.

Use Code S only if the distribution is from a SIMPLE IRA in the first 2 years, the
None
employee/taxpayer has not reached age 591 2, and none of the exceptions under
section 72(t) is known to apply when the distribution is made. The 2-year period
begins on the day contributions are first deposited in the individual's SIMPLE IRA.
Do not use Code S if Code 3 or 4 applies.

T—Roth IRA distribution, exception applies.

Use Code T for a distribution from a Roth IRA if you do not know if the 5-year
holding period has been met but:

None

The participant has reached age 591 2,
The participant died, or

The participant is disabled.
Note: If any other code, such as 8 or P, applies, use Code J.
U—Dividends distributed from an ESOP under
section 404(k).

Use Code U for a distribution of dividends from an employee stock ownership
B
plan (ESOP) under section 404(k). These are not eligible rollover distributions.
Note: Do not report dividends paid by the corporation directly to plan participants
or their beneficiaries. Continue to report those dividends on Form 1099-DIV.

W—Charges or payments for purchasing qualified Use Code W for charges or payments for purchasing qualified long-term care
long-term care insurance contracts under
insurance contracts under combined arrangements which are excludable under
combined arrangements.
section 72(e)(11) against the cash value of an annuity contract or the cash
surrender value of a life insurance contract.

6

*See the first Caution for box 7 instructions, earlier.

Specific Instructions for Form 5498

File Form 5498, IRA Contribution Information, with the IRS
by May 31, 2017, for each person for whom in 2016 you
maintained any individual retirement arrangement (IRA),
including a deemed IRA under section 408(q).
An IRA includes all investments under one IRA plan. It
is not necessary to file a Form 5498 for each investment
under one plan. For example, if a participant has three
certificates of deposit (CDs) under one IRA plan, only one
Form 5498 is required for all contributions and the fair
market values (FMVs) of the CDs under the plan.
However, if a participant has established more than one
IRA plan with the same trustee, a separate Form 5498
must be filed for each plan.
Contributions. You must report contributions to any IRA
on Form 5498. See the instructions under boxes 1, 2, 3, 4,
8, 9, 10, 13a, and 14a, later. If no reportable contributions
were made for 2016, complete only boxes 5 and 7, and
boxes 11, 12a, 12b, 15a, and 15b, if applicable. See
Reporting FMV of certain specified assets, later.

!

CAUTION

You are required to file Form 5498 even if
required minimum distributions (RMDs) or other
annuity or periodic payments have started.

Report contributions to a Kay Bailey Hutchison Spousal
IRA under section 219(c) on a separate Form 5498 using
the name and taxpayer identification number (TIN) of the
spouse.
For contributions made between January 1 and April
18, 2017, trustees and issuers should obtain the
participant's designation of the year for which the
contributions are made.
Direct rollovers, transfers, and recharacterizations.
You must report the receipt of a direct rollover from a
qualified plan, section 403(b) plan, or governmental
section 457(b) plan to an IRA. Report a direct rollover in
box 2.
If you receive a direct rollover to a qualified plan, a
section 403(b) plan, or a governmental section 457(b)
plan, no report is required. For information on direct

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Instructions for Forms 1099-R and 5498 (2016)

rollovers of eligible rollover distributions, see Direct
Rollovers, earlier.
If a rollover or trustee-to-trustee transfer is made from a
savings incentive match plan for employees (SIMPLE)
IRA to an IRA that is not a SIMPLE IRA and the trustee
has adequately substantiated information that the
participant has not satisfied the 2-year period specified in
section 72(t)(6), report the amount as a regular
contribution in box 1 even if the amount exceeds $5,500
($6,500 for participants 50 or older).
Transfers. Do not report on Form 5498 a direct
trustee-to-trustee transfer from (a) a traditional IRA to
another traditional IRA or to a simplified employee
pension (SEP) IRA, (b) a SIMPLE IRA to another SIMPLE
IRA, (c) a SEP IRA to another SEP IRA or to a traditional
IRA, or (d) a Roth IRA to another Roth IRA. For reporting
purposes, contributions and rollovers do not include these
transfers.
Recharacterizations. You must report each
recharacterization of an IRA contribution. If a participant
makes a contribution to an IRA (first IRA) for a year, the
participant may choose to recharacterize the contribution
by transferring, in a trustee-to-trustee transfer, any part of
the contribution (plus earnings) to another IRA (second
IRA). The contribution is treated as made to the second
IRA (recharacterization). A recharacterization may be
made with the same trustee or with another trustee. The
trustee of the first IRA must report the amount contributed
before the recharacterization as a contribution on Form
5498 and the recharacterization as a distribution on Form
1099-R. The trustee of the second IRA must report the
amount received (FMV) in box 4 on Form 5498 and check
the type of IRA in box 7.
All recharacterized contributions received by an IRA in
the same year must be totaled and reported on one Form
5498 in box 4. You may report the FMV of the account on
the same Form 5498 you use to report a
recharacterization of an IRA contribution and any other
contributions made to the IRA for the year.
Catch-up contributions. Participants who are age 50 or
older by the end of the year may be eligible to make
catch-up IRA contributions or catch-up elective deferral
contributions. The annual IRA regular contribution limit of
$5,500 is increased to $6,500 for participants age 50 or
older. Catch-up elective deferral contributions reported on
Form 5498 may be made under a salary reduction SEP
(SARSEP) or under a SIMPLE IRA plan. For 2016, up to
$5,500 in catch-up elective deferral contributions may be
made under a SARSEP, and up to $2,500 to a SIMPLE
IRA plan. For more information on catch-up elective
deferral contributions, see Regulations section 1.414(v)-1.
Include any catch-up amounts when reporting
contributions for the year in box 1, 8, 9, or 10, or for a prior
year in box 13a.
Roth IRA conversions. You must report the receipt of a
conversion from an IRA to a Roth IRA even if the
conversion is with the same trustee. Report the total
amount converted from a traditional IRA, SEP IRA, or
SIMPLE IRA to a Roth IRA in box 3.
IRA revocation or account closure. If a traditional IRA,
Roth IRA, or SIMPLE IRA is revoked during its first 7 days
Instructions for Forms 1099-R and 5498 (2016)

(under Regulations section 1.408-6(d)(4)(ii)) or closed at
any time by the IRA trustee pursuant to its resignation or
such other event mandating the closure of the account,
Form 5498 must be filed to report any regular, rollover,
IRA conversion, SEP IRA, or SIMPLE IRA contributions to
the IRA. For information about reporting a distribution from
a revoked or closed IRA, see IRA Revocation or Account
Closure, earlier.
Total distribution, no contributions. Generally, if a
total distribution was made from an account during the
year and no contributions, including rollovers,
recharacterizations, or Roth IRA conversion amounts,
were made for that year, you need not file Form 5498 nor
furnish the annual statement to reflect that the FMV on
December 31 was zero.
Required minimum distributions (RMDs). An IRA
(other than a Roth IRA) owner/participant must begin
taking distributions for each calendar year beginning with
the calendar year in which the participant attains age 701 2.
The distribution for the 701 2 year must be made no later
than April 1 of the following calendar year; RMDs for any
other year must be made no later than December 31 of
the year. See Regulations section 1.401(a)(9)-6 for RMDs
from annuity contracts.
For each IRA you held as of December 31 of the prior
year, if an RMD is required for the year, you must provide
a statement to the IRA participant by January 31
regarding the RMD using one of two alternative methods
described below. You are not required to use the same
method for all IRA participants; you can use Alternative
one for some IRA participants and Alternative two for the
rest. Under both methods, the statement must inform the
participant that you are reporting to the IRS that an RMD
is required for the year. The statement can be provided in
conjunction with the statement of the FMV.
If the IRA participant is deceased, and the surviving
spouse is the sole beneficiary, special rules apply for
RMD reporting. If the surviving spouse elects to treat the
IRA as the spouse's own, then report with the surviving
spouse as the owner. However, if the surviving spouse
does not elect to treat the IRA as the spouse's own, then
you must continue to treat the surviving spouse as the
beneficiary. Until further guidance is issued, no reporting
is required for IRAs of deceased participants (except
where the surviving spouse elects to treat the IRA as the
spouse's own as described above).
Alternative one. Under this method, include in the
statement the amount of the RMD with respect to the IRA
for the calendar year and the date by which the
distribution must be made. The amount may be calculated
assuming the sole beneficiary of the IRA is not a spouse
more than 10 years younger than the participant. Use the
value of the account as of December 31 of the prior year
to compute the amount. See boxes 11, 12a, and 12b,
later, for how to report.
Alternative two. Under this method, the statement
informs the participant that a minimum distribution with
respect to the IRA is required for the calendar year and
the date by which such amount must be distributed. You
must include an offer to furnish the participant with a
calculation of the amount of the RMD if requested by the
participant.
-19-

Electronic filing. These statements may be furnished
electronically using the procedures described in part F of
the 2016 General Instructions for Certain Information
Returns.
Reporting to the IRS. If an RMD is required, check
box 11. See page 22. For example, box 11 is checked on
the Form 5498 for a 2017 RMD. You are not required to
report to the IRS the amount or the date by which the
distribution must be made. However, see the Caution
following the Box 11 instructions, later, for reporting RMDs
to participants.
For more details, see Notice 2002-27 on page 814 of
Internal Revenue Bulletin 2002-18 at www.irs.gov/pub/irsirbs/irb02-18.pdf as clarified by Notice 2003-3 on
page 258 of Internal Revenue Bulletin 2003-2 at
www.irs.gov/pub/irs-irbs/irb03-02.pdf.
Inherited IRAs. In the year an IRA participant dies, you,
as an IRA trustee or issuer, generally must file a Form
5498 and furnish an annual statement for the decedent
and a Form 5498 and an annual statement for each
nonspouse beneficiary. An IRA holder must be able to
identify the source of each IRA he or she holds for
purposes of figuring the taxation of a distribution from an
IRA. Thus, the decedent's name must be shown on the
beneficiary's Form 5498 and annual statement. For
example, you may enter “Brian Willow as beneficiary of
Joan Maple” or something similar that signifies that the
IRA was once owned by Joan Maple. You may abbreviate
the word “beneficiary” as, for example, “bene.”
For a spouse beneficiary, unless the spouse makes the
IRA his or her own, treat the spouse as a nonspouse
beneficiary for reporting purposes. If the spouse makes
the IRA his or her own, do not report the beneficiary
designation on Form 5498 and the annual statement.
An IRA set up to receive a direct rollover for a
nonspouse designated beneficiary is treated as an
inherited IRA.
Fair market value (FMV). On the decedent's Form
5498 and annual statement, you must enter the FMV of
the IRA on the date of death in box 5. Or you may choose
the alternate reporting method and report the FMV as of
the end of the year in which the decedent died. This
alternate value will usually be zero because you will be
reporting the end-of-year valuation on the beneficiary's
Form 5498 and annual statement. The same figure should
not be shown on both the beneficiary's and decedent's
forms. If you choose to report using the alternate method,
you must inform the executor or administrator of the
decedent's estate of his or her right to request a
date-of-death valuation.
On the beneficiary's Form 5498 and annual statement,
the FMV of that beneficiary's share of the IRA as of the
end of the year must be shown in box 5. Every year
thereafter that the IRA exists, you must file Form 5498 and
furnish an annual statement for each beneficiary who has
not received a total distribution of his or her share of the
IRA showing the FMV at the end of the year and
identifying the IRA as described above.
However, if a beneficiary takes a total distribution of his
or her share of the IRA in the year of death, you need not
file a Form 5498 nor furnish an annual statement for that

beneficiary, but you must still file Form 5498 for the
decedent.
If you have no knowledge of the death of an IRA
participant until after you are required to file Form 5498
(May 31, 2017), you are not required to file a corrected
Form 5498 nor furnish a corrected annual statement.
However, you must still provide the date-of-death
valuation in a timely manner to the executor or
administrator upon request.
In the case of successor beneficiaries, apply the
preceding rules by treating the prior beneficiary as the
decedent and the successor beneficiary as the
beneficiary. Using the example above (Brian Willow as
beneficiary of Joan Maple), when that account passes to
Brian's successor beneficiary, Maurice Poplar, Form 5498
and the annual statement for Maurice should state
“Maurice Poplar as beneficiary of Brian Willow.” The final
Form 5498 and annual statement for Brian Willow will
state “Brian Willow as beneficiary of Joan Maple” and will
show the FMV as of the date of Brian's death or year-end
valuation, depending on the method chosen.
For more information about the reporting requirements
for inherited IRAs, see Rev. Proc. 89-52, 1989-2 C.B. 632.
Disaster relief reporting. Special tax law provisions and
reporting instructions may apply when the president
declares a location to be a major disaster area. To
determine the location of and special rules applicable to
individual federally declared disaster areas, go to IRS.gov
and enter the keyword “disaster” in the upper right hand
corner. Then click on “Tax Relief in Disaster Situations.”
The information provided includes:
A list of the areas for which relief has recently been
granted,
News Releases detailing the scope of the relief and any
special reporting instructions, and
A link to the Federal Emergency Management Agency's
list of federal disaster declarations.
See the instructions for boxes 13a through 13c for
reporting postponed contributions, later.
Qualified settlement income. Qualified settlement
income received in connection with the Exxon Valdez
litigation may be contributed to a traditional or Roth IRA.
See P.L. 110-343, Division C, sec. 504 for contribution
limitations and Box 2. Rollover Contributions, later.
Special reporting for U.S. Armed Forces in designated combat zones. A participant who is serving in or in
support of the Armed Forces in a designated combat zone
or qualified hazardous duty area has an additional period
after the normal contribution due date of April 15 to make
IRA contributions for a prior year. The period is the time
the participant was in the designated zone or area plus at
least 180 days. The participant must designate the IRA
contribution for a prior year to claim it as a deduction on
the income tax return.
Under section 219(f), combat zone compensation that
is excluded from gross income under section 112 is
treated as includible compensation for purposes of
determining IRA contributions.
A qualifying participant is:
Serving, or has served in a combat zone;
-20-

Instructions for Forms 1099-R and 5498 (2016)

Serving, or has served in a qualifying hazardous duty
are; or
Serving, or has served in an active direct support area.
If a qualifying participant designates an IRA
contribution for a prior year, other than an IRA contribution
made by April 15 for the preceding year, you must report
the type of IRA (box 7) and the amount on Form 5498.
Report the amount either for (1) the year for which the
contribution was made or (2) a subsequent year. See
boxes 13a, 13b, and 13c, later.
1. If you report a contribution for 2016 made before
April 18, 2017, no special reporting is required. Include
the contribution in box 1 or box 10 of an original Form
5498 or of a corrected Form 5498 if an original was
previously filed.
2. If you report the contribution on Form 5498 in a
subsequent year, you must include the year for which the
contribution was made, the amount of the contribution,
and one of the following indicators.
a. Use “EO13239” for Afghanistan and those countries
in direct support, including Djibouti, Jordan, Kyrgyzstan,
Pakistan, Somalia, Syria, Tajikistan, Uzbekistan, Yemen,
and the Philippines. For the Philippines only, personnel
must be deployed in conjunction with Operation Enduring
Freedom supporting military operations in the Afghanistan
combat zone.
b. Use “EO12744” for the Arabian Peninsula, including
air space and adjacent waters (the Persian Gulf, the Red
Sea, the Gulf of Oman, the Gulf of Aden, the portion of the
Arabian Sea that lies north of 10 degrees north latitude
and west of 68 degrees east longitude, and the total land
areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain,
Qatar, the United Arab Emirates), and Jordan which is in
direct support of the Arabian Peninsula.
c. Use “EO13119” or Public Law 106-21 “PL106-21”
for the Federal Republic of Yugoslavia (Serbia and
Montenegro), Albania, Kosovo, the Adriatic Sea, and the
Ionian Sea north of the 39th parallel. (Note: the combat
zone designation for Montenegro and Kosovo (previously
a province within Serbia) under Executive Order 13119
remains in force even though Montenegro and Kosovo
became independent nations since EO 13119 was
signed.)
For additions to, or subtractions from, the list of
combat zones or qualified hazardous duty areas
CAUTION
implemented by executive orders and public
laws, and direct support areas designated by the
Secretary of Defense, after the publication date of these
instructions, go to www.irs.gov/form5498.

!

Example. For a $4,000 IRA contribution designated by
a participant who served under EO 13239 for the tax year
2013, enter “4000” in box 13a, “2013” in box 13b, and
“EO13239” in box 13c only. Make no entry in box 1 or
box 10.
Repayment of qualified reservist distributions.
Report any repayment of a qualified reservist distribution
as described in section 72(t)(2)(G) in boxes 14a (amount)
and 14b (with indicator code “QR”).
Military death gratuities and servicemembers'
group life insurance (SGLI) payments. Recipients of
Instructions for Forms 1099-R and 5498 (2016)

military death gratuities and SGLI payments may
contribute amounts received to a Roth IRA, up to the
amount of the gratuity or SGLI payment less any amounts
contributed to Coverdell ESAs. Report the amount of the
rollover contribution in box 2 only. See section 408A(e)(2),
and Notice 2010-15, 2010-06 I.R.B. 390, available at
www.irs.gov/irb/2010-06_IRB/ar09.html, for more
information on limitations.
Electronic filers. You may request an automatic
waiver from filing Forms 5498 for combat zone
participants by submitting Form 8508, Request for Waiver
From Filing Information Returns Electronically. Once you
have received the waiver, you may report all Forms 5498
for combat zone participants on paper. Alternatively, you
may report contributions made by the normal contribution
due date electronically and report the contributions made
after the normal contribution due date on paper. You may
also report prior year contributions by combat zone
participants on a corrected Form 5498 electronically or on
paper.
See part F in the 2016 General Instructions for Certain
Information Returns for information on how to request a
waiver on Form 8508.
Reporting FMV of certain specified assets. Assets
held in an IRA that are not readily tradable on an
established securities market or option exchange, or that
do not have a readily available FMV, must be reported at
the FMV determined as of December 31, 2016. See the
instructions for boxes 15a and 15b, later.
Corrected Form 5498. If you file a Form 5498 with the
IRS and later discover that there is an error on it, you must
correct it as soon as possible. See part H in the 2016
General Instructions for Certain Information Returns, or
Pub. 1220, if filing electronically. For example, if you
reported contributions as rollover contributions in box 2,
and you later discover that part of the contribution was not
eligible to be rolled over and was, therefore, a regular
contribution that should have been reported in box 1
(even if the amount exceeds the regular contribution limit),
you must file a corrected Form 5498.
Statements to participants. If you are required to file
Form 5498, you must provide a statement to the
participant. By January 31, 2017, you must provide
participants with a statement of the December 31, 2016,
value of the participant's account and RMD, if applicable.
Trustees of SIMPLE IRAs also must provide a statement
of the account activity by January 31, 2017. Contribution
information for all other types of IRAs must be provided by
May 31, 2017. You are not required to provide information
to the IRS or to participants as to whether a contribution is
deductible or nondeductible. In addition, the participant is
not required to tell you whether a contribution is
deductible or nondeductible.
If you furnished a statement of the FMV of the account,
and RMD if applicable, to the participant by January 31,
2017, and no reportable contributions, including rollovers,
recharacterizations, or Roth IRA conversions, were made
for 2016, you need not furnish another statement (or Form
5498) to the participant to report zero contributions.
However, you must file Form 5498 with the IRS by May
31, 2017, to report the December 31, 2016, FMV of the
-21-

Box 2. Rollover Contributions

account and, for years after 2016, the FMV of
hard-to-value assets. This rule also applies to beneficiary
accounts under the inherited IRA rules, earlier. For more
information about the requirement to furnish statements to
participants, see part M in the 2016 General Instructions
for Certain Information Returns.

Enter any rollover contributions (or contributions treated
as rollovers) to any IRA received by you during 2016.
These contributions may be any of the following.
A 60-day rollover between IRAs of the same type.
A direct or indirect rollover from a qualified plan, section
403(b) plan, or governmental section 457(b) plan.
Any qualified rollover contribution as defined in section
408A(e) from an eligible retirement plan (other than an
IRA) to a Roth IRA.
A military death gratuity.
An SGLI payment.
Qualified settlement income received in connection
with the Exxon Valdez litigation.
An airline payment amount.

If you do not furnish another statement to the
participant because no reportable contributions
CAUTION
were made for the year, the statement of the FMV
of the account must contain a legend designating which
information is being filed with the IRS.

!

Truncating participant's identification number on
payee statements. Pursuant to Treasury Regulations
section 301.6109-4, all filers of Form 5498 may truncate a
participant’s identification number (social security number
(SSN), individual taxpayer identification number (ITIN),
adoption taxpayer identification number (ATIN), or
employer identification number (EIN)) on payee
statements. Truncation is not allowed on any documents
the filer files with the IRS. See part J in the 2016 General
Instructions for Certain Information Returns.

For the rollover of property, enter the FMV of the
property on the date you receive it. This value may be
different from the value of the property on the date it was
distributed to the participant.
For more details, see Pub. 590A.

Box 3. Roth IRA Conversion Amount

Account Number

Enter the amount converted from a traditional IRA, SEP
IRA, or SIMPLE IRA to a Roth IRA during 2016. Do not
include a rollover from one Roth IRA to another Roth IRA,
or a qualified rollover contribution under section 408A(e)
from an eligible retirement plan (other than an IRA) to a
Roth IRA. These rollovers are reported in box 2.

The account number is required if you have multiple
accounts for a recipient for whom you are filing more than
one Form 5498. Additionally, the IRS encourages you to
designate an account number for all Forms 5498 that you
file. See part L in the 2016 General Instructions for Certain
Information Returns.

Box 4. Recharacterized Contributions

Box 1. IRA Contributions (Other Than Amounts
in Boxes 2–4, 8–10, 13a, and 14a)

Enter any amounts recharacterized plus earnings from
one type of IRA to another.

Enter contributions to a traditional IRA made in 2016 and
through April 18, 2017, designated for 2016.

Box 5. Fair Market Value of Account

Enter the FMV of the account on December 31, 2016. For
inherited IRAs, see Inherited IRAs, earlier.

Report gross contributions, including the amount
allocable to the cost of life insurance (see box 6) and
including any excess contributions, even if the excess
contributions were withdrawn. If an excess contribution is
treated as a contribution in a subsequent year under
section 219(f)(6), do not report it on Form 5498 for the
subsequent year. It has already been reported as a
contribution on Form 5498 for the year it was actually
contributed.

Trustees and custodians are responsible for
ensuring that all IRA assets (including those not
CAUTION
traded on established markets or with otherwise
readily determinable market value) are valued annually at
their fair market value.

!

Also include employee contributions to an IRA under a
SEP plan. These are contributions made by the employee,
not by the employer, that are treated as regular IRA
contributions subject to the 100% of compensation and
$5,500 ($6,500 for participants 50 or older) limits of
section 219. Do not include employer SEP IRA
contributions or SARSEP contributions under section
408(k)(6). Instead, include them in box 8.
Also, do not include in box 1 contributions to a SIMPLE
IRA (report them in box 9) and a Roth IRA (report them in
box 10). In addition, do not include in box 1 rollovers and
recharacterizations (report rollovers in box 2 and
recharacterizations in box 4), or a Roth IRA conversion
amount (report in box 3).

Box 6. Life Insurance Cost Included in Box 1

For endowment contracts only, enter the amount included
in box 1 allocable to the cost of life insurance.

Box 7. Checkboxes

Check the appropriate box.

IRA. Check “IRA” if you are filing Form 5498 to report
information about a traditional IRA account.
SEP. Check “SEP” if you are filing Form 5498 to report
information about a SEP IRA. If you do not know whether
the account is a SEP IRA, check the “IRA” box.
SIMPLE. Check “SIMPLE” if you are filing Form 5498 to
report information about a SIMPLE IRA account. Do not
file Form 5498 for a SIMPLE 401(k) plan.
Roth IRA. Check “Roth IRA” if you are filing Form 5498 to
report information about a Roth IRA account.

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Instructions for Forms 1099-R and 5498 (2016)

Box 8. SEP Contributions

Enter employer contributions made to a SEP IRA
(including salary deferrals under a SARSEP) during 2016,
including contributions made in 2016 for 2015, but not
including contributions made in 2017 for 2016. Trustees
and issuers are not responsible for reporting the year for
which SEP contributions are made. Do not enter
employee contributions to an IRA under a SEP plan.
Report any employee contributions to an IRA under a SEP
plan in box 1. Also include in box 8 SEP contributions
made by a self-employed person to his or her own
account.

Box 9. SIMPLE Contributions

Enter contributions, including deferrals, made to a
SIMPLE IRA during 2016, including contributions made in
2016 for 2015, but not including contributions made in
2017 for 2016. Trustees and issuers are not responsible
for reporting the year for which SIMPLE contributions are
made. Do not include contributions to a SIMPLE 401(k)
plan.

Box 10. Roth IRA Contributions

Enter any contributions made to a Roth IRA in 2016 and
through April 18, 2017, designated for 2016. However,
report Roth IRA conversion amounts in box 3. Report a
qualified rollover contribution made under section 408A(e)
from an eligible retirement plan (other than an IRA) to a
Roth IRA in box 2.

Box 11. Check if RMD for 2017

Check the box if the participant must take an RMD for
2017. You are required to check the box for the year in
which the IRA participant reaches age 701 2 even though
the RMD for that year need not be made until April 1 of the
following year. Then check the box for each subsequent
year an RMD is required to be made.
Boxes 12a and 12b are provided for your use to
report RMD dates and amounts to participants.
CAUTION
You may choose to complete these boxes, or
continue to provide a separate Form 5498, or a separate
statement, to report the information required by
Alternative one or Alternative two, earlier. To determine
the RMD, see the regulations under sections 401(a)(9)
and 408(a)(6) and (b)(3).

!

Box 12a. RMD Date

Enter the RMD date if you are using Form 5498 to report
the additional information. See page 18.

Box 12b. RMD Amount

Enter the RMD amount if you are using Form 5498 to
report the additional information under Alternative one.
See page 18.

Box 13a. Postponed Contribution

Report the amount of any postponed contribution made in
2016 for a prior year. If contributions were made for more

Instructions for Forms 1099-R and 5498 (2016)

than 1 prior year, each prior year's postponed contribution
must be reported on a separate form.

Box 13b. Year

Enter the year for which the postponed contribution in
box 13a was made.

Box 13c. Code

Enter the reason the participant made the postponed
contribution.
For participants' service in a combat zone, hazardous
duty area, or direct support area, enter the appropriate
executive order or public law as defined under Special
reporting for U.S. Armed Forces in designated combat
zones, earlier.
For participants who are “affected taxpayers,” as
described in an IRS News Release relating to a federally
designated disaster area, enter FD.

Box 14a. Repayments

Enter the amount of any repayment of a qualified reservist
distribution or of a designated disaster distribution (for
example, a qualified disaster recovery assistance
distribution).

Box 14b. Code

Enter QR for the repayment of a qualified reservist
distribution, or DD for repayment of a federally designated
disaster distribution.

Box 15a. FMV of Certain Specified Assets

Enter the FMV of the investments in the IRA that are
specified in the categories identified below.

Box 15b. Code(s)

Enter the code for the type(s) of investments held in the
IRA for which the FMV is reported in Box 15a. A maximum
of two codes can be entered in box 15b. If more than two
codes apply, enter code H.
A — Stock or other ownership interest in a corporation
that is not readily tradable on an established securities
market.
B — Short- or long-term debt obligation that is not
traded on an established securities market.
C — Ownership interest in a limited liability company or
similar entity (unless the interest is traded on an
established securities market).
D — Real estate.
E — Ownership interest in a partnership, trust, or
similar entity (unless the interest is traded on an
established securities market).
F — Option contract or similar product that is not
offered for trade on an established option exchange.
G — Other asset that does not have a readily available
FMV.
H — More than two types of assets (listed in A through
G) are held in this IRA.

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Index
A
Account closure, IRA 3, 19
Alternate payee under QDRO 9
Annuity distributions 1–15
Automatic contribution arrangements 6
Automatic rollovers 4, 6
B
Beneficiaries 8
C
Charitable gift annuities 10
Combat zones, designated 20
Corrected Form 1099-R 8
Corrected Form 5498 21
Corrective distributions 6
Cost of current life insurance
protection 10
D
Death benefit payments 9
Deemed IRAs 3
Designated Roth account,
contributions 2
Designated Roth account, direct
rollover 4, 5
Designated Roth account,
distributions 9, 10, 15
Direct rollovers 4–6, 8, 10, 12, 14, 17,
18, 22
Disaster relief reporting 20
Disclaimer of an IRA 8
Distributions under EPCRS 7
DVECs 3
E
Eligible rollover distribution 4, 12, 14
Employee contributions, retirement
plan 13, 15
Employer securities, distributions 7,
10–12, 14
Endowment contracts 2, 22
Excess deferrals, excess contributions,
corrective distributions of 6
F
Failing ADP or ACP test, corrections 7

Federal income tax withholding 12
Form 1099-R 1
Form 5498 18
Form 945 12
G
Guide to Distribution Codes 16–18
I
Inherited IRAs 20, 22
In-plan Roth rollover (IRR) 2, 9, 15
Insurance contracts 1, 14
Involuntary distributions 4, 6
IRA contributions 18
IRA distributions 1, 3, 15
IRA recharacterizations 3, 6, 10, 13, 18,
19, 22
IRA revocation 3, 19
L
Life insurance contract distributions 2
Loans treated as distributions 4, 7
Losses, retirement distributions 7, 11
M
Military death gratuities 21
Military retirement 1
N
Net unrealized appreciation 4, 11, 12, 14
Nonperiodic distributions 12
Nonqualified plan distributions 2
Nonresident aliens 9
P
Pension distributions 1–15
Periodic payments 12
Permissible withdrawals under section
414(w) 8
Postponed contribution 23
Profit-sharing distributions 1–15
Q
QDRO 4, 6, 9
Qualified HSA funding distributions 1
Qualified plan distributions 1–15

-24-

Qualified rollover contributions 5, 22
Qualified settlement income 20
R
Recharacterized IRA contributions 6, 9,
13, 18
Required minimum distribution 19, 23
Retirement payments 1–15
Revocation, IRA 3, 19
RMD 19, 23
RMD amount 23
RMD date 23
Rollovers 4–6, 8–10, 12, 14, 18, 19, 22
Roth IRA contributions 19, 22
Roth IRA conversions 3, 6, 11, 13, 19,
22
Roth IRA distributions 3, 11, 13
S
Section 1035 exchange 2, 6, 9
Section 402(f) notice 5
Section 404(k) dividends 2
SEP contributions 3, 11, 18, 22, 23
SEP distributions 3, 11, 14
Servicemembers' Group Life Insurance
(SGLI) payments 21
SIMPLE contributions 18, 22, 23
SIMPLE distributions 3, 6, 11, 14
State and local information 15
Statements to recipients/participants 9
T
Taxable amount, retirement
distributions 10
Transfers:
Form 1099-R 6
Form 5498 18
U
U.S. Armed Forces, special reporting 20
W
Withholding 12
Federal income tax 12