1099-R distribution code E.

What the IRS says code E is

Table 1 gives the entry as "Distributions under Employee Plans Compliance Resolution System (EPCRS)" and refers payers to the EPCRS section. The used-with column says None. The code B entry adds that a section 415 distribution under EPCRS from a designated Roth account uses code E, not B.

The payer instructions say distributions to correct a section 415 failure are not eligible rollover distributions, although they are subject to federal income tax withholding under section 3405. They are not subject to social security, Medicare or FUTA taxes, and are not subject to the 10% additional tax under section 72(t).

Boxes: for elective deferrals (other than designated Roth contributions), the full amount goes in boxes 1 and 2a with box 5 blank. For a return of employee contributions plus earnings, box 1 is the gross, box 2a the earnings and box 5 the contributions returned. Code E goes in box 7a either way.

How it affects Form 1040

The 2025 Form 1040 instructions say not to include corrective distributions (including earnings) of excess elective deferrals or other excess contributions to retirement plans on lines 5a and 5b. They are to be reported on line 1h instead, and the plan must advise you of the year or years the distributions are includible in income.

So a code E form usually does not feed lines 5a and 5b. The year the amount counts as income depends on the plan's notice, not only on the year of the form.

Common mistakes

• Putting a code E amount on line 5b by habit. The 1040 instructions send corrective distributions of excess deferrals to line 1h.
• Adding the 10% additional tax. The payer instructions say it does not apply to section 415 corrective distributions.
• Trying to roll it over. These are not eligible rollover distributions.
• Missing the year. The instructions say the plan advises you of the year or years the amount is includible in income.

Worked example

Illustration, not a real case. A plan returns $2,000 of elective deferrals to an employee to fix an excess annual addition. The payer reports $2,000 in boxes 1 and 2a, leaves box 5 blank and enters code E. The employee reads the plan's notice for the year the amount counts as income before deciding what goes on the return.

Related codes

Code E sits beside 9, U, S. The full 1099-R distribution codes lookup lets you search every code; the other pages in this set are 6, 9, F, K, S, U, W.

Sources

Retrieved November 2, 2026. Review status: needed before this page is treated as final.

• IRS, Instructions for Forms 1099-R and 5498 (2026): Table 1, Guide to Distribution Codes, plus the box 1, 2a and 7a text.
• IRS, Instructions for Form 1040 (2025): lines 4a and 4b (IRA distributions) and 5a and 5b (pensions and annuities).

Form 1099-R changes for 2026: box 7 becomes box 7a. On forms for earlier years the code is in box 7. The Form 1040 instructions read are for tax year 2025.