Updated October 17, 2026. Quick answer: Box 8 is captioned Other, and the recipient instructions say that when you received an annuity contract in a distribution, “the value of the contract is shown.” It is not part of the taxable payout, since “It isn’t taxable when you receive it and shouldn’t be included in boxes 1 and 2a.” The sections below quote the situations the instructions describe.
Retirement forms read line by line: Form 4972 lines 8 to 17 and Form 4972 lines 18 to 30.
What box 8 shows
The box is captioned simply Other on the 2025 form, with a percentage line below the dollar line. The recipient instructions explain: “If you received an annuity contract as part of a distribution, the value of the contract is shown.”
The sections below quote three situations: a contract included in a distribution, a contract with periodic payments, and charges for qualified long-term care insurance contracts. The other boxes are listed on Form 1099-R boxes explained.
Why it stays out of boxes 1 and 2a
The recipient instructions say: “It isn’t taxable when you receive it and shouldn’t be included in boxes 1 and 2a.” They continue: “When you receive periodic payments from the annuity contract, they’re taxable at that time.”
The payer is given the matching direction: “Do not include this item in boxes 1 and 2a.” Boxes 1 and 2a are covered on the box 1 page and the box 2a page.
How the payer finds the value
The payer instructions begin with the situation: “Lump sum distributions from a plan that include an annuity contract.” (the 2025 edition has the same sentence with the word “which” in place of “that”). They then say what to enter: “Enter the current actuarial value of an annuity contract that is part of a lump-sum distribution.”
For the amount itself the instructions give a formula: “show the value as an amount equal to the current actuarial value of the annuity contract, reduced by an amount equal to the excess of the employee’s contributions over the cash and other property (not including the annuity contract) distributed.”
Here is an illustration of that formula, not an IRS example. Suppose the current actuarial value of the contract is $60,000 and the employee’s contributions are $35,000 while the cash and other property distributed (not counting the contract) is $15,000. The excess of contributions over what was distributed is $35,000 minus $15,000 which equals $20,000. The box 8 value is then $60,000 minus $20,000 which equals $40,000. The numbers are invented to show how the pieces fit.
More than one recipient, and the percentage
The recipient instructions say “If the distribution is made to more than one person, the percentage of the annuity contract distributed to you is also shown.” The payer instruction is “If an annuity contract is part of a multiple recipient lump-sum distribution, enter in box 8, along with the current actuarial value, the percentage of the total annuity contract each Form 1099-R represents.”
The recipient instructions add: “You’ll need this information if you use the 10-year tax option (Form 4972).” Box 9a, which also carries a percentage, is covered on the boxes 9a and 9b page.
An annuity that is already paying
The recipient instructions also say: “If you previously received an annuity contract as part of a distribution (or the contract was purchased through a direct rollover from a plan account) and periodic payments from that annuity contract are included in box 1, the value of the contract as of the end of the year is shown.”
The next sentence says: “This information may be provided to your plan administrator to determine any required distribution from that plan.” The general minimum-distribution rules are on the required minimum distribution page. For an annuitized contract, the payer instruction is: “The issuer of a commercial annuity contract which has been annuitized must report the current actuarial value of the contract as of the end of the year if payments have been made from the contract during the year.” That sentence is from the 2025 edition and changed in 2026, as described at the end of this page.
Long-term care insurance charges
The recipient instructions say “If charges were made for qualified long-term care insurance contracts under combined arrangements, the amount of the reduction in the investment (but not below zero) in the annuity or life insurance contract is reported here.” The payer-side version is “Also, enter in box 8 the amount of the reduction in the investment (but not below 0 (zero)) against the cash value of an annuity contract or the cash surrender value of a life insurance contract due to charges or payments for qualified long-term care insurance contracts.”
The box 1 passage says “code W will be shown in box 7”, and then “You need not report these amounts on your tax return.” Code W is explained on the code W page. For a contract transferred tax free, the same passage says “code 6 will be shown in box 7”; see the code 6 page and the 1035 exchange page.
Where it goes next
Box 8 reports the contract’s value. The recipient instructions say the contract is not taxable when you receive it, and that periodic payments from it are taxable when you receive them. Inherited contracts are covered on the inherited annuity page, and a comparison of a lump sum with a monthly annuity is on the lump sum vs monthly annuity page.
The sibling boxes on the same form are the box 6 page, for employer stock, and the box 5 page, for cost recovered tax free. The codes that sit beside box 8 are listed on the box 7 codes page.
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 8 is split into boxes 8a and 8b in the 2026 edition.
The 2025 form has one box, captioned Other, with a percentage line under it. The 2026 form splits it into two: box 8a is still captioned Other, and box 8b is captioned “Percentage of annuity contract”. The recipient heading in 2026 reads “Boxes 8a and 8b.” The payer instruction for the percentage now says “enter in box 8b the percentage of the total annuity contract each Form 1099-R represents along with the current actuarial value in box 8a”.
A second difference is in the payer instruction for an annuitized contract. The 2025 payer instruction says “must report the current actuarial value of the contract”, while the 2026 instruction says “For tax year 2026, the issuer of a commercial annuity contract that has been annuitized may (but is not required to) report the current actuarial value”.
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 box 8 value to the taxable amount. The recipient instructions say it “shouldn’t be included in boxes 1 and 2a.”
- Treating the receipt of the contract as income. The instructions say “It isn’t taxable when you receive it” and that “When you receive periodic payments from the annuity contract, they’re taxable at that time.”
- Discarding the percentage on a shared payout. The instructions say “You’ll need this information if you use the 10-year tax option (Form 4972).”
Related: 1035 exchange of an annuity, inherited annuity rules, lump sum vs monthly annuity, 1099-R code W, and required minimum distribution.
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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.