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my first 72(t) 1099-R from Schwab is coded “2

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ByKen

L1: my first 72(t) 1099-R from Schwab is coded “2Hello all,I know there have been many postings concerning the desireable code “2” on SEPP 1099-R”s. At least for the first year of my 72(T) that started in March 2006, I just saw the online 1099-R from Schwab that is coded with a “2” in box 7. The plan I submitted to them for review, was to take starting balance in this rollover that I had sent to them, to do no recalculations, and to use amortization method with the JAN 06 max allowable rate for the payments starting in March 2006. They were instructed to spilt my annual withdrawal into two equal payments that are made each March and September for the five year period. So far, so good. Maybe I”l continue to get the code 2 in the future, since it is based on just the IRA $$ they are holding and the payout will not change for the five year period. We can hope. KEN2007-01-25 14:00, By: Ken, IP: [67.166.47.200]
L2: my first 72(t) 1099-R from Schwab is coded “2Ken,
Thanks for posting that positive info about Schwab. Nice to see there are still a few custodians that will provide the exception code. Probably those that will want to see 72t plans of the plain vanilla variety.2007-01-25 21:09, By: Alan S., IP: [24.116.66.98]

L2: my first 72(t) 1099-R from Schwab is coded “2Don”t get too excited. I received a code ” 2 ” for every year, including 2006, from Fidelity; but not anymore. Starting in 2007, the code will not be used even if you use their calculations, make no modifications, have been receiving the code in the past, etc.
2007-01-26 05:34, By: Gary, IP: [24.145.246.83]

L2: my first 72(t) 1099-R from Schwab is coded “2I too will have to deal with the Fidelity (custodian) change from Code 2 to Code 1 in 07. I ran my 2006 TaxAct software this eve. to see the impact this will have as an experiment. As expected a Form 5329 gets generated when Code 1 is in Box 7 of the 1099R, and the net impact on Fed Taxes was exactly the same vs Code 2 / no Form 5329, i.e. no difference.
But when the Code 1 / 5329 scenario was used STATE TAXES were affected. In my case TaxAct calculated that I owed MORE, State taxes?? That wasa surprise to me and now I wonder what this will cost me next year in taxes if I stay with Fidelity as my custodian.
Anybody else notice this impact? Why would State taxes increas when Fed. didn”t?2007-03-04 20:39, By: Roger, IP: [65.27.131.85]

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