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1099 Code T


jrollo

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Have a client who took a distribution from his Roth IRA. He is 62 years old and made a conversion from a traditional IRA to a Roth well over 5 year ago. Everything was done correctly with the conversion.

The 1099 in box 7 has a code T. I have researched form 8606 and believe we have to report the distribution only on line 16a form 1040 as non-taxable income. In addition is this the correct code or should the T be a 7 for for a normal distribution?

Thank you

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Have a client who took a distribution from his Roth IRA. He is 62 years old and made a conversion from a traditional IRA to a Roth well over 5 year ago. Everything was done correctly with the conversion. The 1099 in box 7 has a code T. I have researched form 8606 and believe we have to report the distribution only on line 16a form 1040 as non-taxable income. In addition is this the correct code or should the T be a 7 for for a normal distribution?

The T indicates that the payer doesn't know if the recipient has had the Roth for over 5 years. You use part III of the 8606 to say that he has and that the money came from the conversions. As you note, the gross amount ends up on line 16a with zero taxable on 16b.

Code 7 is not used for a Roth. Code Q would be used if the payer knew for certain that the distribution was qualified. [see the instructions for the 1099-R.]

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