1099-R distribution code S.

What the IRS says code S is

Table 1 says: "Use code S only if the distribution is from a SIMPLE IRA in the first 2 years, the employee/taxpayer has not reached age 59½, and none of the exceptions under section 72(t) are known to apply when the distribution is made." The 2-year period begins on the day contributions are first deposited in the individual's SIMPLE IRA. The instructions add: "Do not use code S if code 3 or 4 applies." The used-with column lists J.

Form 5329, Part I, line 4: "If any amount on line 3 was a distribution from a SIMPLE IRA received within 2 years from the date you first participated in the SIMPLE IRA plan, you must multiply that amount by 25% instead of 10%. These distributions are included in boxes 1 and 2a of Form 1099-R and are designated with code S in box 7."

How it affects Form 1040

A SIMPLE IRA distribution counts as an IRA distribution on lines 4a and 4b of Form 1040 under the 2025 instructions, which list a SIMPLE IRA within "IRA". The 1040 instructions also say you may owe an additional tax on an early IRA distribution that was not rolled over, and point to the Schedule 2, line 8 instructions.

Code S and the 25% rate come from the Form 5329 side. The estimator on this page multiplies the early-distribution amount by 25% after any exception amount, following line 4 of Form 5329.

Common mistakes

• Using 10% by habit. Within the first 2 years, line 4 of Form 5329 uses 25% for code S amounts.
• Counting the 2 years from the calendar year. The instructions say the period begins on the day contributions are first deposited in the individual's SIMPLE IRA.
• Overlooking an exception. Code S says no exception was known to the payer; the Form 5329 exception list still applies to you.
• Mixing it up with J. J is for Roth IRAs; Table 1 allows S and J together for a Roth SIMPLE IRA early distribution.

Worked example

Illustration, not a real case. Priya, 41, withdraws $4,000 from her SIMPLE IRA 14 months after the first deposit. Form 1099-R shows $4,000 in boxes 1 and 2a with code S. If no exception applies, the Form 5329 line 4 amount is $4,000 x 25% = $1,000, compared with $400 at 10%.

Related codes

Code S sits beside K, E, U. The full 1099-R distribution codes lookup lets you search every code; the other pages in this set are 6, 9, E, F, K, 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).
• IRS, Instructions for Form 5329 (2025): Part I, line 4. This is the tax year 2025 edition, the latest read.

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.