1099-R Code 9: Cost of Current Life Insurance Protection
The taxable value of insurance coverage bought inside your plan, not cash you received.
What the IRS instructions say
Is it taxable, and does the 10 percent penalty apply?
Taxable as ordinary income for the year, even though no cash reached you: it is the economic value of the life insurance protection your plan paid for. There is no 10 percent early distribution penalty on it, and it cannot be rolled over. Because you were taxed on it, that amount becomes basis you recover tax free when the contract is later distributed or paid out.
If this code looks wrong
The IRS matches Box 7 against your return, so start with the payer: request a corrected 1099-R, which is the IRS's standing instruction for incorrect forms. No corrected copy by the end of February? The IRS can contact the payer for you, and Form 4852 substitutes as a last resort. Remember that an indirect 60-day rollover is correctly coded 1 or 7, because the payer cannot see the redeposit; direct rollovers should show G or H, as our rollover guide explains before the paperwork ever gets cut.
Sources: IRS Instructions for Forms 1099-R and 5498; IRS Tax Topics 558 (early distributions), 413 (rollovers), and 154 (incorrect forms). Verified July 2026.
General educational information, not tax advice. Your distribution's taxation depends on your facts; consult a qualified tax professional. ClearChoiceRadar is not affiliated with the IRS or any government agency.