1099-R CODE U

[MOBEE]

Is the Code U on a 1099-R subject to the early withdrawal penalty as well as being taxable. This is a new one for me... Thanks

[Pacun]

Is the Code U on a 1099-R subject to the early withdrawal penalty as well as being taxable. This is a new one for me... Thanks

It seems that the whole thing is treated as dividends. This is what IRS says:

U—Dividends distributed from an ESOP under section 404(k).

Use Code U for a distribution of dividends from an employee stock ownership plan (ESOP) under section 404(k). These are not eligible rollover distributions. Note. Do not report dividends paid by the corporation directly to plan participants or their beneficiaries. Continue to report those dividends on Form 1099-DIV.

[kcjenkins]

Is the Code U on a 1099-R subject to the early withdrawal penalty as well as being taxable. This is a new one for me... Thanks

No, it's not subject to penalty. If you enter the 1099R and enter code U it will handle it properly.