Updated October 17, 2026. Quick answer: Exception code 13 is for distributions from a section 457 plan that are not from a rollover from a qualified retirement plan. You enter the amount on line 2 of Form 5329 and write 13 in the space provided. The instructions also say the extra tax does not apply to an eligible governmental section 457 plan distribution, to the extent it is not attributable to a transfer from a qualified plan.
What exception code 13 means
The instructions give the code in a single sentence: “Distributions from a section 457 plan, which aren’t from a rollover from a qualified retirement plan.”
The same idea appears in the Part I list of items the extra tax does not reach: “A distribution from an eligible governmental section 457 deferred compensation plan to the extent the distribution isn’t attributable to an amount transferred from a qualified retirement plan.” The Part I list opens with “The additional tax on early distributions doesn’t apply to any of the following.”
What a section 457 plan is
Pub. 575 describes who has one: “If you work for a state or local government or for a tax-exempt organization, you may be able to participate in a section 457 deferred compensation plan.”
It also says how to tell whether yours counts: “To find out if your plan is an eligible plan, check with your employer.” Plan type matters for this code, because the Part I wording refers to an eligible governmental plan. The withdrawal rules for these plans are covered on the 457(b) withdrawal rules page and the page on 457(b) plans and early withdrawal penalties.
When money moved in from another plan
Code 13 has a limit built into it. Pub. 575 says: “To the extent that a distribution is attributable to amounts an eligible state or local governmental section 457 deferred compensation plan has received in a direct transfer or rollover from a qualified retirement plan”, described in that publication, “that distribution is considered a distribution from a qualified retirement plan.” That matches the code’s own words, which refer to a distribution that is not “from a rollover from a qualified retirement plan”. So the part that came from a rollover is outside code 13, and you should look at the other exception numbers for that part. If you are comparing a 457(b) with the age 55 rule, see 457(b) vs rule of 55.
How to claim it
Pub. 590-B lists the 457 plan among the retirement plan types in its general discussion: “A deferred compensation plan (section 457 plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state.” If a distribution from your section 457 plan appears on Form 5329, the steps are the ordinary Part I steps. The instructions for line 2 say “Enter on line 2 the amount that you can exclude.” For code 13 that is the portion that fits the description above, with 13 in the space provided.
How to enter it on line 2
The instructions for line 2 begin “Enter on line 2 the amount that you can exclude.” They continue “In the space provided, enter the applicable exception number”. The form’s own wording for line 2 reads “Enter the appropriate exception number from the instructions”. The earlier lines are covered on the Part I lines 1 to 4 page, and the other exceptions are compared on early withdrawal penalty exceptions. The whole form is mapped in Form 5329 explained.
Where it goes next
Line 2 feeds line 3. The form’s caption for line 3 reads “Amount subject to additional tax. Subtract line 2 from line 1”. Line 4 then reads “Additional tax. Enter 10% (0.10) of line 3.” The form continues “Include this amount on Schedule 2 (Form 1040), line 8”. The instructions say the same for a joint return: “Include the combined tax on Schedule 2 (Form 1040), line 8.” Schedule 2 is explained on the Schedule 2 page.
Edition and line numbers
This page reads the 2025 Form 5329 and its 2025 instructions, and the 2025-returns edition of the Publication where one is cited. These are the current files irs.gov served on 2026-10-17, and they are the forms for the tax year 2025 return, filed in 2026. Check the tax year printed on the form you are filling in and use the line numbers and exception numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Treating a rolled in amount as a 457 plan distribution. The code covers distributions “which aren’t from a rollover from a qualified retirement plan.”
- Assuming every plan called a 457 plan qualifies. The Part I item says “A distribution from an eligible governmental section 457 deferred compensation plan”
- Using the whole distribution on line 2 when part came from elsewhere. The Part I item applies “to the extent the distribution isn’t attributable to an amount transferred from a qualified retirement plan.”
Related: 457(b) withdrawal rules, 457(b) and the early withdrawal penalty, 457(b) vs rule of 55, and Form 5329 explained.
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Answer againSources
- Instructions for Form 5329 (2025): https://www.irs.gov/pub/irs-pdf/i5329.pdf
- Form 5329 (2025): https://www.irs.gov/pub/irs-pdf/f5329.pdf
- Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) (for 2025 returns): https://www.irs.gov/pub/irs-pdf/p590b.pdf
- Publication 575, Pension and Annuity Income (for 2025 returns): https://www.irs.gov/pub/irs-pdf/p575.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.