Age 59 1/2 and monthly payments

[Guest Nineteen]

I am preparing Form 1099-R for a retired participant in a DB plan. He retired before age 50 and has been receiving monthly annuity payments since that time. He reached age 59 1/2 in June of 2004.

For 1099 purposes, should he be coded as 1 (early distribution, no exception) even though he meets the "substantially equal" rule? The 1099 instructions don't seem to have a code for substantially equal payments for someone who separated from service before age 55.

Alternatively, may he be coded as 7 (normal distribution) since he turned age 59 1/2 during 2004?

[WDIK]

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