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Quick Guide to Tax Reporting for Retirement Distributions - 1099R

Date: January 30, 2024

Question: I received a 1099-R from FCMM for my retirement distribution(s) for the last year. Where do I enter this information on my tax return?

After the close of a tax year, your retirement plan sends one, or more, Form 1099-R to each distribution recipient and to the IRS, reflecting any activity of income or rollover distribution from your account. Box 7 will contain a code classifying the type of distribution. (Examples include: 7 for normal distribution; B for Roth distribution; G for rollover to another account.)

Form 1099-R Box 1 lists the gross (total) distribution. Box 2a lists any portion of your distribution that has been determined to be taxable.

If your distribution was designated by FCMM as housing allowance eligible, Box 2a "Taxable amount" will be blank and Box 2b will be checked to indicate “Taxable amount not determined”. (Contributions made while a minister or missionary was eligible for housing allowance are eligible for the housing allowance exclusion when distributed. FCMM designates 100% of such distributions as housing allowance.)

The reason the taxable amount has not been “determined” is that you must maintain records to be able to document your eligible housing allowance expenses (not exceeding the IRS guideline of the lesser amount of: housing allowance designated, actual housing expense, or fair rental value) and to report any unused amount as taxable income. If you used the full amount of your housing allowance designation, there is no additional income to report.

The amount in Form 1099-R Box 1 is reported on your tax return Form 1040 in in income the section for "Pensions and Annuities” and the amount in 1099-R Box 2a "Taxable Amount" is entered in the appropriate line.

If you did not use the full amount of your designated housing allowance, report the unused amount in the "Pensions and Annuities" line of Form 1040 so that it will be added to your taxable income. If you used the entire distribution as housing allowance, you will likely need to enter 0. (Tax preparation software may require an override for this field to enter the amount or zero).

Typically, you do not enter income from retirement distributions on Form SE Self-Employment Tax since retirement income is not subject to self-employment tax. However, if you are not retired and are receiving a distribution from FCMM, your distribution may be subject to SE tax.

If you are using tax return software (examples: TurboTax, TaxAct, H&R Block), be sure to review the entries made to ensure the reporting is done correctly, adding optional supporting details or adjusting entries or an override if necessary to accomplish accurate tax filing.

Note: The information in this article is provided as an educational resource and is based on current regulations as our advisers understand them. FCMM does not practice, and cannot provide, tax or tax-filing counsel. Please consult a qualified tax preparer if you need assistance. For a minister or missionary, you should be sure your tax preparer understands clergy tax matters.

New to retirement distributions? Here's a information for reporting your 1099-R on your tax return.