How will a coronavirus-related distribution be reported on Form 1099-R?

On June 19, 2020, in Notice 2020-50, the IRS clarified that the amount of distribution will be reported on Form 1099-R in Box 7 either with Code 1 (early distribution, no known exception) or Code 2 (early distribution, exception applies), but with no difference in tax treatment for the individual (the individual will report the appropriate tax treatment when filing the 2020 tax return).

When it comes to retirement plan distributions, the IRS confirmed that even when an employer-sponsored retirement plan doesn’t allow CRDs, participants may designate their distributions as CRDs by filing Form 8915-E with their 2020 tax return.

Cetera Retirement Plan Specialists is a third-party administrator and may not offer tax, legal or investment advice. Plan sponsors should consult their own tax, legal or investment professionals.