MOBEE Posted February 16, 2010 Report Share Posted February 16, 2010 Is the Code U on a 1099-R subject to the early withdrawal penalty as well as being taxable. This is a new one for me... Thanks Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 16, 2010 Report Share Posted February 16, 2010 Is the Code U on a 1099-R subject to the early withdrawal penalty as well as being taxable. This is a new one for me... Thanks It seems that the whole thing is treated as dividends. This is what IRS says: U—Dividends distributed from an ESOP under section 404(k). Use Code U for a distribution of dividends from an employee stock ownership 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. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 16, 2010 Report Share Posted February 16, 2010 Is the Code U on a 1099-R subject to the early withdrawal penalty as well as being taxable. This is a new one for me... Thanks No, it's not subject to penalty. If you enter the 1099R and enter code U it will handle it properly. Quote Link to comment Share on other sites More sharing options...
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