How to Report a 401k Withdrawal on Your Tax Return

To report a 401(k) withdrawal on your tax return, take the figures from the Form 1099-R your plan administrator sends you and enter them on Form 1040: the gross distribution on Line 5a, the taxable amount on Line 5b, and any federal tax already withheld on Line 25b. If you were under 59½ when you took the money and no exception applies, add Schedule 2 for the 10% early-withdrawal penalty, usually with Form 5329 attached. Rollovers and qualified Roth distributions use the same lines but a different combination, which is covered below.

Start With the 1099-R

Form 1099-R is the document that drives every number on your return. Your plan administrator mails it by January 31 of the year after the withdrawal and sends an identical copy to the IRS, so any mismatch between your return and the form will generate an automated notice.¹

Four boxes carry the information you need:

Box 1, Gross Distribution: the total amount that left your account before any withholding.
Box 2a, Taxable Amount: the portion that counts as taxable income. For a traditional 401(k) funded entirely with pre-tax contributions, this is almost always the same number as Box 1.
Box 4, Federal Income Tax Withheld: what the administrator already sent to the IRS on your behalf. It behaves like a prepayment toward your tax bill.
Box 7, Distribution Code: a one- or two-character code that tells the IRS what kind of distribution this was and whether a penalty applies.

Box 7 is the one to read first because it shapes the rest of the reporting. Code 1 is an early distribution before age 59½ and usually triggers the 10% additional tax. Code 7 is a normal distribution, typically because you are over 59½ or separated from service after age 55. Code G is a direct rollover to another qualified plan or IRA and is not taxable. Code B applies to distributions from a designated Roth 401(k). Code M covers a plan loan offset after you separate from service.²

If Box 2b (“Taxable amount not determined”) is checked, the administrator could not calculate the taxable share. That is uncommon for a traditional 401(k) built entirely from pre-tax contributions, but it can happen when the account also holds after-tax money, and in that case you have to work out the taxable portion yourself.

Entering a Taxable Withdrawal on Form 1040

The 2025 Form 1040, which you file in 2026, uses Lines 5a and 5b for pensions and annuities, and that is where a 401(k) distribution goes.³ Three lines do the work:

Line 5a: the gross distribution from Box 1 of your 1099-R.
Line 5b: the taxable amount from Box 2a. For a fully pre-tax traditional 401(k), this matches Line 5a.
Line 25b: the federal income tax withheld from Box 4. This combines with the withholding from your W-2 and any other 1099s to reduce your tax owed or increase your refund.

If Box 2a is blank and your 401(k) held only pre-tax contributions, enter the full Box 1 amount on Line 5b. The IRS treats the entire distribution as taxable unless you can show an after-tax basis in the account. If more than one 1099-R arrives for the same tax year, add the amounts together line by line.

The number on Line 5b flows into your adjusted gross income, so a large withdrawal can lift you into a higher bracket and change the math on credits and other income-sensitive items. Tax software pulls these figures straight from the 1099-R entry screen. On a paper return, attach a copy of each 1099-R that shows withholding.

Checking the Withholding Before You File

Before the distribution went out, you were asked to complete Form W-4R to tell the administrator how much to withhold.⁴ If you did not file one, the default was 10% for most non-periodic payments. For an eligible rollover distribution paid directly to you rather than sent to another plan, 20% was mandatory regardless of what you elected.⁵ Whatever came out appears in Box 4 and credits against your bill on Line 25b.

Reporting a Rollover

A rollover is a distribution on paper but not a taxable event, and it uses Lines 5a and 5b differently.

Direct Rollover (Code G)

In a direct rollover, your 401(k) balance moves straight to another employer plan or an IRA without passing through your bank account. The 1099-R shows the full amount in Box 1 and Code G in Box 7, and no 20% withholding applies because the money went custodian to custodian.⁶

On the 1040, put the Box 1 amount on Line 5a, enter zero on Line 5b, and check the rollover box on Line 5c.³ That combination tells the IRS the money moved but is not taxable.

60-Day Indirect Rollover

If the funds came to you first, the administrator withheld 20% for federal taxes, and you had 60 days to deposit the full original amount into another qualified plan or IRA. To avoid tax on the withheld 20%, you had to replace it from other money when you made the deposit. Roll over only the 80% you received and the missing 20% becomes a taxable distribution, with a possible 10% early-withdrawal penalty on top.⁵

When you did complete a full rollover within 60 days, report it the same way as a direct rollover: Box 1 on Line 5a, zero on Line 5b, rollover box checked on Line 5c. The 20% withheld still goes on Line 25b and will typically come back as part of your refund. The one-rollover-per-year rule that limits IRA-to-IRA rollovers does not apply when a 401(k) or other employer plan is involved.⁶

Reporting a Roth 401(k) Distribution

A distribution from a designated Roth 401(k) is tax-free if it is qualified, which requires that the account has been open at least five tax years since your first Roth contribution and that you are 59½, disabled, or deceased.⁷ The five-year clock starts on January 1 of the tax year you first contributed to a designated Roth account in that plan.

For a qualified Roth distribution, the 1099-R shows the gross amount in Box 1, zero in Box 2a, and Code B in Box 7.² Put Box 1 on Line 5a and zero on Line 5b. If the distribution is non-qualified, your own contributions still come out tax-free, but the earnings portion is taxable and may face the 10% early-withdrawal penalty, and that taxable portion goes on Line 5b.

If You Owe the 10% Early-Withdrawal Penalty

A withdrawal before age 59½ triggers a 10% additional tax on the taxable portion, on top of regular income tax, and your 1099-R will carry Code 1 in Box 7.⁸ How you report the penalty depends on whether you qualify for an exception.

If Code 1 is correct and no exception applies, enter the 10% penalty directly on Schedule 2 (Form 1040), Line 8, with no separate form required.⁹ The Schedule 2 total then carries to Line 23 of your 1040.

If an exception applies, you have to file Form 5329 to claim it. Without that form, the IRS assumes the full 10% is owed.¹⁰ In Part I you report the total early distribution, subtract the amount covered by an exception, enter a numbered exception code, and apply 10% to anything left. The exceptions recognized by the IRS include leaving your employer during or after the year you turn 55 (age 50 for qualified public safety employees), total and permanent disability, death, substantially equal periodic payments, unreimbursed medical expenses above 7.5% of AGI, a qualified domestic relations order, an IRS levy on the plan, qualified reservist distributions, up to $5,000 for a birth or adoption, and several categories added by the SECURE 2.0 Act, among them terminal illness, domestic abuse, a $1,000 annual emergency personal expense, and up to $22,000 for a federally declared disaster.¹¹ Not every plan offers every optional SECURE 2.0 distribution, so check with the administrator before relying on one. Regardless of plan adoption, the exception itself is claimed on Form 5329.

Hardship withdrawals deserve their own note: taking the money for a hardship does not by itself waive the 10% penalty. You still need to fit one of the exceptions above to avoid it.

Reporting a Required Minimum Distribution

Once you reach age 73, you must take required minimum distributions from a traditional 401(k) each year.¹²

If the real 1099-R shows up later with different numbers, file Form 1040-X to amend. Keep every statement and every email with the administrator in case the IRS asks how you arrived at the figures you reported.

1
Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
2
Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498
3
Internal Revenue Service. 1040 (2025) Instructions
4
Internal Revenue Service. About Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions
5
eCFR. 26 CFR 31.3405(c)-1 – Withholding on Eligible Rollover Distributions
6
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
7
Internal Revenue Service. Retirement Plans FAQs on Designated Roth Accounts
8
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
9
Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions From Retirement Plans
10
Internal Revenue Service. Instructions for Form 5329 – Additional Taxes on Qualified Plans and Other Tax-Favored Accounts
11
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
12
Internal Revenue Service. Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R