What this line means
The total amount of early distributions you received from qualified retirement plans, IRAs, or other tax-favored accounts during the year. An early distribution is any withdrawal taken before you reach age 59½. Enter the amount from Form 1099-R, Box 1, for each distribution that does not have an exception code in Box 7.
Does this apply to you?
- You withdrew money from a traditional IRA, Roth IRA, 401(k), or 403(b) before age 59½
- You received a distribution from a retirement plan after separating from service before age 59½
- You received a 1099-R with a code 1 (early distribution, no known exception) in Box 7
- You rolled over a distribution but missed the 60-day deadline
Easy to overlook
Roth IRA contribution withdrawals are not early distributions You can withdraw your original Roth IRA contributions (not earnings) at any time, at any age, without penalty or tax. Only the earnings portion of a Roth distribution before age 59½ is subject to the early distribution penalty. If your total Roth distributions do not exceed your cumulative contributions, line 1 does not include those amounts. 1 IRS Publication 590-B — Distributions from IRAs
1099-R coding errors happen frequently Plan administrators sometimes use the wrong distribution code in Box 7 of Form 1099-R. If your 1099-R shows code 1 (early distribution) but you qualify for an exception (disability, medical expenses, first-time home purchase), do not rely on the code. Claim the exception on line 2 of Form 5329 regardless of what the 1099-R says. 2 IRS Form 5329 instructions — Part I
Watch out for this
Including distributions you rolled over within 60 days. A timely rollover is not a taxable distribution and does not belong on line 1. If your 1099-R shows the full distribution amount but you completed a rollover, report the rollover on Form 1040 and exclude that amount from Form 5329 line 1. Including rolled-over amounts triggers an unnecessary penalty.
Footnotes
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IRS Publication 590-B, Distributions from Individual Retirement Arrangements. https://www.irs.gov/pub/irs-pdf/p590b.pdf ↩
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IRS Form 5329 Instructions, Part I. https://www.irs.gov/instructions/i5329 ↩