1099 R - Dist. Code 3

[Dave T]

T/p is 57 years old and receives a 1099R with Distribution Code 3 - Disability.

Below the box 7 it asks, if Code 3, is recipient below minimum retirement age? Is this considered to be 59 1/2 or is it dependent upon the employer's retirement policy? He worked for New York State which does allow retirement at 55 .

If it's 59 1/2 I check yes and he becomes eligible for EIC as this disability pension is considered earned income, in fact when inputting it flows to line 7. If it's 55 no EIC and he ends up owing some. Tried looking in the Pub on 1099's but didn't see the issue addressed.

Thanks very much

Dave T

[jklcpa]

What Disability Benefits Qualify as Earned Income for EITC?

IRS considers disability retirement benefits as earned income until you reach minimum retirement age. Minimum retirement age is the earliest age you could have received a pension or annuity if you did not have the disability.

This is from the IRS site here: http://www.irs.gov/Individuals/Disability-and-Earned-Income-Tax-Credit

Pub 596, page 7 says the same thing.