What this line means
The total gross amount of pension, annuity, and retirement plan distributions you received during the year. This includes distributions from 401(k)s, 403(b)s, defined benefit pensions, annuity contracts, and other employer-sponsored retirement plans. The taxable portion goes on line 5b. IRA distributions go on line 4a instead.
Does this apply to you?
- You receive monthly pension payments from a former employer
- You took a distribution from a 401(k) or 403(b) plan
- You receive payments from a commercial annuity contract
- You rolled over a 401(k) to an IRA (the rollover amount still gets reported here)
- You retired and started receiving payments from a defined benefit plan
Easy to overlook
Rollovers show up as distributions on line 5a If you rolled your 401(k) into an IRA, the full rollover amount appears on line 5a. The taxable amount on line 5b is zero (for a direct rollover), but seeing a large number on 5a alarms people. This is correct reporting — the IRS needs to see the gross distribution even when no tax is owed because of the rollover. 1 IRS Publication 575 — Pension and Annuity Income
After-tax contributions to employer plans create basis If you made after-tax contributions to your 401(k) or pension (not Roth 401(k), but traditional after-tax), that portion comes out tax-free. Your plan administrator should track this basis, but not all do it well. If your 1099-R does not correctly show the nontaxable portion, you may need to reconstruct your contribution history. 2 General filing pattern — 401(k) rollover reporting errors
Watch out for this
Reporting a direct rollover as taxable income. If your 401(k) was rolled directly to an IRA (trustee-to-trustee transfer), the distribution code on your 1099-R should be “G” and line 5b should be zero. Entering the full amount on both 5a and 5b creates a tax bill on money that was simply moved between accounts.
Footnotes
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IRS Publication 575, Pension and Annuity Income. https://www.irs.gov/pub/irs-pdf/p575.pdf ↩
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IRS Form 1040 Instructions. See also IRS Publication 17, Your Federal Income Tax. https://www.irs.gov/pub/irs-pdf/p17.pdf ↩