1099R Code 3

[ChEAr$]

wages?

Have a 1099R code 3. Client has not reached the age of retirement for the plan. So, this is taxed on line 7 as wages.

Since it is taxed on line 7, is this considered earned income for an IRA contribution?

Ah, this sounds like the problems we used to have on the old W2P forms when one
had not reached retirement age.

Anyone remember?

[Brad Imsdahl]

I don't know, but...

TTB, page 13-9 does not say line 7, Form 1040 amounts are compensation for IRA purposes. TTB says any other amount listed in box 1 of the W-2.

I think the reason it is on a 1099-R and not a W-2 is because the disability benefit is like a deferred compensation plan. Its not, but it is more like pension or deferred comp benefits than earnings. Deferred compensation, even when it is deferred earnings, is not compensation for IRA contribution purposes.

[WhiteOleander]

Have a 1099R code 3. Client has not reached the age of retirement for the plan. So, this is taxed on line 7 as wages.

Since it is taxed on line 7, is this considered earned income for an IRA contribution?