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Posted

The 2024 Instructions for Form 1099-R just came out and page 16 provided the following guidance regarding the Box 7 distribution code for the various new SECURE 1.0 and SECURE 2.0 distribution types (QBAD; EPED; TIID and DAV):

".....use Code 1 even if the distribution is made for .....a qualified birth or adoption distribution, an emergency personal expense distribution, a terminally ill individual distribution, or an eligible distribution to a domestic abuse victim under section 72(t)(2)(B), (D), (E), (F), (G), (H), (I), (K), or (L)."

However, I didn't see any guidance on which code should be used for qualified disaster recovery distributions under Section 331 of SECURE 2.0 / IRC 72(t)(11). Did I miss it? Should we use Code 1 or 2 for qualified disaster recovery distributions?

Posted

The instructions for Code 2 say "Any other distribution subject to an exception under section 72(q), (t), (u), or (v) that is not required to be reported using Code 1, 3, or 4."

Code 72(t)(2)(M) says "(M) Distributions from retirement plans in connection with federally declared disasters.  Any qualified disaster recovery distribution."

Codes 1, 3, and 4 respectively are 1—Early distribution, no known exception, 3-Disability and 4-Death.

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