Updated October 17, 2026. Quick answer: Exception code 99 is what you enter on Form 5329 line 2 when more than one exception to the additional tax applies to your distributions. Line 2 still asks for an amount you can exclude, with the number 99 in the space provided. Keep the Forms 1099-R and any statements that support each exception you are relying on.
What code 99 is
Code 99 is the last item in the instructions’ list of exceptions, and its entry is one sentence: “Enter this exception number if more than one exception applies.” It is not a reason to avoid the tax by itself. It is a way to report that several reasons apply. The reasons themselves are gathered on the early withdrawal penalty exceptions page, and the whole form is mapped in Form 5329 explained.
What line 2 asks for
The form’s own line 2 reads “Early distributions included on line 1 that are not subject to the additional tax”, followed by “Enter the appropriate exception number from the instructions”. The instructions explain it in the same terms: “Enter on line 2 the amount that you can exclude.” and “In the space provided, enter the applicable exception number”. Then the instruction that leads to code 99: “If more than one exception applies, enter 99.”
So line 2 always has two parts, an amount and a number. When one exception covers the distribution, the number is that exception’s own number. When more than one applies, the number is 99.
Single-number examples for contrast
Most entries in the instructions name one number. For a Roth IRA first-home distribution the instructions say “Also include this amount on line 2 of your 2025 Form 5329 and enter exception number 09.” For a distribution wrongly flagged as early, Publication 575 says “Enter exception number “12” on line 2.” Neither of those is a case for 99, because each names a single exception. The first-home rule has its own page at exception code 09, and the wrongly flagged case is on exception code 12.
When the exception is only part of the distribution
An exception does not have to cover the whole distribution to matter. Among the reasons to file, the instructions list this one: “You received a distribution subject to the tax on early distributions from a qualified retirement plan (other than a Roth IRA) and you meet an exception to the tax on early distributions from the list shown later, but box 7 of your Form 1099-R doesn’t indicate an exception or the exception doesn’t apply to the entire distribution.”
Publication 575 says something similar: “Even if you don’t owe any of these taxes, you may have to complete Form 5329 and attach it to your Form 1040, 1040-SR, or 1040-NR.”
What to keep with the return
A practical answer is to keep what supports each exception you rely on. The Form 1099-R is the first place to look, because Publication 575 says “If the payer knows that an exception applies to your early distribution, distribution code “2,” “3,” or “4” should be shown in box 7 of your Form 1099-R and you don’t have to report the distribution on Form 5329.” That is why the Form 1099-R matters. Some exceptions ask for more. For example, code 19 says “Attach a statement that provides the name, age, and TIN of the child or eligible adoptee.” See the 1099-R box 7 codes page for the payer’s side of this.
A short note that lists, for each exception, the amount and the reason, makes it easier to rebuild how you reached the total on line 2 if you are asked. The note is only your own working paper.
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 3 then feeds line 4, whose caption reads “Additional tax. Enter 10% (0.10) of line 3. Include this amount on Schedule 2 (Form 1040), line 8”. For couples the instructions add “If both you and your spouse are required to file Form 5329, complete a separate form for each of you.” The Part I lines are walked through on the Part I lines 1 to 4 page, and the Schedule 2 line is covered on the Schedule 2 page.
Edition and line numbers
This page reads the 2025 Form 5329 and its 2025 instructions, and where a Publication is cited, the 2025-returns edition of that Publication. 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. The sentence for code 99 and the wording of line 2 are as quoted above. 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 them differently.
Common mistakes
- Entering one exception’s number when several apply. The instructions say “If more than one exception applies, enter 99.”
- Entering 99 without an amount. The instructions say “Enter on line 2 the amount that you can exclude.”
- Assuming the payer’s coding settles it. The instructions list a reason to file when “box 7 of your Form 1099-R doesn’t indicate an exception or the exception doesn’t apply to the entire distribution.”
Related: Form 5329 explained, Early withdrawal penalty exceptions, 1099-R box 7 codes, and Schedule 2 (Form 1040).
Sources
- 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 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.