Reply To: 1099-R on Roth IRA annuity payment

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Alan S.

The annuity payments are Roth distributions and your Roth is qualified. However you file, a tax program is not going to accept a 7 coded 1099R on a Roth IRA as it is not one of the possible Roth IRA distribution codes and the 1099R Inst specifically state that Code 7 is not to be used for a Roth IRA distribution. Therefore in addition to the taxes due a filing work around will probably be required. I have not heard of any distributions on a retirement account that were made from some other source. If a calculation error was made on the annuity payments for a qualified Roth, the make up distribution remains a qualified Roth distribution. I am aware that TIIA often does things differently than other firms, but this one makes no sense.
Is your Roth IRA account number shown on this 1099R? This usually appears in the lower left corner of the form.

Perhaps you can get access to the people who actually code these distributions for submission to the tax Dept or whatever firm actually issues the 1099R forms. If they used Code 7 that will cause filing issues in addition to taxes on a Roth IRA, they at least should be able to provide a detailed explanation for it.