What Is an Individual Employee 1099-R Form?

The 1099-form reports distribution information.

In addition to a form W-2, employees may receive a 1099-R form when they accept certain types of payments or distributions. Taxpayers should be familiar with how this form is used.

The Facts

The Internal Revenue Service (IRS) requires employers and financial institutions to report a distribution of $10 or more made from an individual retirement arrangement (IRA), annuity, pension, profit-sharing plan, insurance contract or survivor income benefit plan on a 1099 form. The 1099 form includes basic information about the individual receiving the distribution, the gross distribution paid during the tax year, the amount of the distribution that is taxable, the federal income tax that has been withheld, the contributions made to the investment or premiums paid and a code that represents the type of distributions made to the holder of the plan.

Function

Distributions are taxable and in some situations they may also be subject to a tax penalty for early withdrawal. The 1099-R form is used to ensure that the required amount of federal and state taxes is deducted from the distributions received by employees or other beneficiaries.

Time Frame

The 1099-form reports any distributions made during the tax year and are provided to recipients by January 31 of the year after the distribution was made. Individuals must include the information that is on their 1099-form when they file their annual tax returns.

References

• Department of Treasury Internal Revenue Service: Instructions for Forms 1099-R and 5498
• Investopedia: Form 1099-R