Reporting QDRO on 1099R

[Kathy]

1099R instructions don't seem to allow for using 2 as the distribution code for a QDRO. Alternate payee was under 59 1/2. Do we use 1? or 7?

[Lynn Campbell]

were the funds rolled over? If not, I can see no code that fits this situation. I would say that Code 2 seems right but the instructions do not cover the QDRO exception to 72(t). It seems the IRS wants you to use Code #1 but that may/will lead to complications.

[Guest Pensions in Paradise]

You should use Code 2. The IRS issued a correction to the 1099 instructions. See IRS Changes

The revised instructions now specify that you should use Code 2 for any distribution subject to an exception under section 72(q), (t), and (v) that is not required to be reported using Code 1, 3, or 4.

QDRO distributions are subject to the exception under section 72(t)(2)©.

[Kathy]

Thank you! Guess I should have looked a little harder.