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Different 1099-R Question
Old 01-31-2016, 04:18 PM   #1
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Different 1099-R Question

I'm pulling together my information in preparation for doing 2015 taxes. I started a 72t in 2015 and received a 1099-R from Vanguard for the distribution. I opted to have 10% tax withheld which they show in Box 4.

However, they have distribution code 01 in Box 7 (early distribution, no known exception applies (under 591/2)). Should they have used code 02 (early distribution, exception applies) since this is a 72t?

Still reading through the instructions for form 5329, but wondering if this is an error by Vanguard?

Anyone using Vanguard for a 72t distribution?

Thanks, Dog

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Old 01-31-2016, 04:26 PM   #2
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Probably not an error by Vanguard but you could call and ask.
Did Vanguard set up the 72t? Otherwise how would they know? When I direct transferred funds from Fidelity to an IRA account, I got the same distribution code you have even though the check notation indicated it was going into an IRA. When I prepared my taxes, the tax software queried me on whether an exception applied and did not apply the 10% penalty based on my response.

...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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Old 01-31-2016, 06:20 PM   #3
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Thanks Jazz. I did some additional research and it appears that it is typical for Vanguard and others to use code 01. I will need to file form 5329 and use code 02 for the exemption.

FYI for others new to 72t.
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