Form rr-1099-r

[burtga]

When receiving distribution, the form does not indicate which distribution code to use which info is required by ATX and other Tax Programs. Please explain the difference between Code #2 (Disability, Exception Applies) and Code #3 (Disability). As far as I know, neither is a taxable event as Code #1 is. Can anyone please explain the difference and where in the TaxBook I can find written commentary on the subject.

[S T]

Welcome to the Board!

In the TTB - see page 13-3 and it will explain the exceptions

Sandy

[mastertaxguy]

1099-r distribution codes

Code 2 is NOT a disability distribution. It applies to early distributions for which the payor knows of an exception to the 10% early distribution penalty.

Code 3 is for disability. HOWEVER, a payor's determination of disability may not pass muster with IRS.

[Gary2]

Do you mean RRB-1099-R? Check if your software has special handling for Railroad Retirement benefits. I can never remember which of the two forms is more like Social Security and which is more like a standard pension.

[Burke]

In ATX, click the box at the top of the 1099R worksheet to bring up the drop-down menu for special forms. RRRB is one of them. The input will change to format exactly like a RRB-1099R.
You will still have to calculate the simplified method if there are employee contributions. See bottom of worksheet. The top part of RRB-1099 (blue-shaded) is the Social Security equivalent benefit. That goes on the SS worksheet for 1040. If your state does not tax railroad retirement benefits or Social Security, the taxable portion of each should carry to the state form as a deduction. RRB-1099R's are Code 7. Disability benefits from a railroad pension plan are on a regular 1099R.

[David1980]

Here's what the IRS says to use in publication 575:

"Generally, amounts shown on your Form RRB-1099-R are considered a normal distribution. Use distribution code “7” if you are asked for a distribution code. Distribution codes are not shown on Form RRB-1099-R"

[burtga]

Form RR-1099-R

Do you mean RRB-1099-R? Check if your software has special handling for Railroad Retirement benefits. I can never remember which of the two forms is more like Social Security and which is more like a standard pension.

You are correct. Correct Form Number is RRB-1099-R. Sorry.
Distribution Code #2 appears to designate "Disability, Exception Applies"
Distribution Code #3 appears to designate simply "Disability"