Updated October 17, 2026. Quick answer: Box 6 reports net unrealized appreciation, or NUA, when a plan payout included your employer’s stock. The recipient instructions say the NUA “is taxed only when you sell the securities unless you choose to include it in your gross income this year.” That passage addresses a lump-sum distribution from a qualified plan that includes employer securities. How the box relates to boxes 1 and 2a is quoted below.
Retirement forms read line by line: Form 4972 and Form 4972 Part II.
What box 6 shows
The 2025 form captions the box “Net unrealized appreciation in employer’s securities”. The recipient instructions explain it this way: “If you received a lump-sum distribution from a qualified plan that includes securities of the employer’s company, the net unrealized appreciation (NUA) (any increase in value of such securities while in the trust) is taxed only when you sell the securities unless you choose to include it in your gross income this year.” The pointer that follows is “See Pub. 575 and Form 4972.” The topic is covered in depth on the net unrealized appreciation page, and a calculator is on the NUA vs IRA rollover calculator page.
When the payer fills it in
The payer instructions describe the trigger: “Use this box if a distribution from a qualified plan (except a qualified distribution from a designated Roth account) includes securities of the employer corporation (or a subsidiary or parent corporation) and you can compute the Net Unrealized Appreciation (NUA) in the employer’s securities.”
The payer instructions also say: “Enter all the NUA in employer securities if this is a lump-sum distribution.” and “If this is not a lump-sum distribution, enter only the NUA in employer securities attributable to employee contributions.” The recipient version matches: “If you didn’t receive a lump-sum distribution, the amount shown is the NUA attributable to employee contributions, which isn’t taxed until you sell the securities.” The total-distribution checkbox is described on the box 2b page.
How box 6 relates to boxes 1 and 2a
The payer is told where the NUA belongs relative to the other two amount boxes: “Include the NUA in box 1 but not in box 2a except in the case of a direct rollover to a Roth IRA or a designated Roth account in the same plan”. Boxes 1 and 2a are covered on the box 1 page and the box 2a page.
A second passage in the payer instructions shows the relationship for a payout of both stock and cash. The payer shows “the actual cash and/or FMV of the property (including employer securities) distributed in box 1, the gross less any NUA on employer securities in box 2a” and “any NUA in box 6.” If only stock is distributed, the same passage says “If only employer securities are distributed, show the FMV of the securities in boxes 1 and 2a and make no entry in box 5 or 6.”
Here is an illustration of the relationship, not an IRS example. Suppose a payout of cash and employer stock has a box 1 amount of $100,000 and the payer reports $40,000 of NUA in box 6. Under the rule just quoted, the box 2a amount would be the gross less the NUA: $100,000 minus $40,000 equals $60,000. The figures are made up to show the arithmetic only.
Direct rollovers, and Roth rollovers
For a direct rollover the payer instruction says: “You do not have to complete this box for a direct rollover.” The payer instructions also say: “You do not have to report capital gain in box 3 or NUA in box 6.” Box 3 is covered on the box 3 page.
For a Roth rollover, the recipient instructions say “For a direct rollover to a designated Roth account in the same plan or to a Roth IRA or Roth SIMPLE IRA, the NUA is included in box 2a.” And in the box 2a instruction: “you must include on the “Taxable amount” line of your tax return the amount shown in this box plus the amount in box 6, if any.” The code for a direct rollover to a plan or IRA is described on the code G page, and the Roth version on the code H page.
Withholding, codes and timing
The payer instructions say “Any NUA excludable from gross income under section 402(e)(4) is not included in the amount of any eligible rollover distribution that is subject to 20% withholding.” The withholding box is explained on the box 4 page.
The payer chart describes code A in box 7 as “May be eligible for 10-year tax option”. The code is described on the code A page, and the whole code list is on the box 7 codes page.
Where to look next
The recipient instructions point to Pub. 575 and Form 4972. A page on what to do about a figure that looks wrong is the page on what to do when a 1099-R is wrong.
Related boxes are the box 5 page, for after-tax cost recovered tax free, and the box 8 page, for an annuity contract value that is part of a payout. The complete list of boxes is on Form 1099-R boxes explained.
Edition and box numbers
This page reads the 2025 edition of Form 1099-R and its recipient instructions, together with the 2025 Instructions for Forms 1099-R and 5498 that are written for the payer. That is the edition for tax year 2025. The 2026 edition was the one irs.gov served as current on 2026-10-17, and the two editions were compared. Box 6 keeps its number, but the caption is shorter on the 2026 form.
The 2025 caption is “Net unrealized appreciation in employer’s securities” and the 2026 caption is “NUA in employer’s securities”. The payer instructions heading changed in the same way, from “Box 6. Net Unrealized Appreciation in” to “Box 6. NUA in Employer’s Securities”. The recipient paragraph for box 6 reads the same in both editions. The payer paragraph differs in the heading and in its first sentence, where the 2025 wording about computing “the Net Unrealized Appreciation (NUA) in the employer’s securities” becomes “the NUA in the employer’s securities” in 2026, and a cross-reference has a small punctuation change.
Check the tax year printed on the form you received. The full box-by-box list is on Form 1099-R boxes explained.
Common mistakes
- Adding the NUA to the taxable amount automatically. The payer is told to “Include the NUA in box 1 but not in box 2a” except in the Roth rollover cases.
- Assuming every plan payout with a box 6 amount was a lump sum. The recipient instructions say “If you didn’t receive a lump-sum distribution, the amount shown is the NUA attributable to employee contributions”.
- Ignoring the Roth rollover rule. The recipient instructions say the amount on the taxable line is “the amount shown in this box plus the amount in box 6, if any.”
Related: net unrealized appreciation explained, NUA vs IRA rollover calculator, 1099-R code A, 1099-R code G, and 1099-R code H.
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Answer againSources
- Form 1099-R (2025) with Instructions for Recipient: IRS archived PDF (irs.gov)
- Form 1099-R (2026) with Instructions for Recipient: https://www.irs.gov/pub/irs-pdf/f1099r.pdf
- 2025 Instructions for Forms 1099-R and 5498: IRS archived PDF (irs.gov)
- 2026 Instructions for Forms 1099-R and 5498: https://www.irs.gov/pub/irs-pdf/i1099r.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.