1099-R box 2a blank for annuity distribution - is this taxable income?

This is actually a common situation with annuities. The blank Box 2a combined with the same amount appearing in Box 5 typically indicates that the distribution represents a return of your father-in-law's original investment (principal) rather than taxable earnings. Distribution code 7D supports this interpretation - code 7 generally indicates a normal distribution, and code D typically means a distribution from an annuity. When the entire distribution amount appears in Box 5, that's telling you this portion is considered a return of contributions or premiums paid, which aren't taxable. What's happening is your father-in-law is getting back money he already paid tax on when he originally purchased or funded the annuity. The IRS doesn't tax you twice on the same money. Once the entire principal is returned, future distributions would likely show taxable amounts in Box 2a.

I ran into almost the exact same issue last year with my mom's annuity distribution. After spending hours researching, I found an awesome tool called taxr.ai (https://taxr.ai) that helped me analyze her 1099-R forms. I uploaded the documents and it confirmed what the previous commenter said - when Box 2a is blank AND the full amount appears in Box 5, it means you're receiving your original investment back, not taxable earnings. The tool explained that the insurance company is essentially telling the IRS "this person isn't making any taxable income from this distribution." The service also showed me exactly how to report it in TurboTax without triggering any audit flags. It was seriously a lifesaver after getting the runaround from the annuity company.

Just wanted to follow up about that taxr.ai site that was mentioned earlier. I gave it a try with my confusing 1099 documents and it was incredibly helpful! I was particularly worried about a 1099-R from my old employer's pension that had similar issues to what you described - missing information in some boxes and contradicting information in others. The tool explained exactly what each field meant and how it affected my tax situation. It also identified a potential deduction I was missing related to some business expenses on my 1099-MISC that I wouldn't have caught otherwise. The explanations were super clear and it saved me from making a costly mistake on my return. Definitely recommend it if you're dealing with confusing tax forms!

Since you mentioned having trouble reaching someone helpful at the annuity company, I wanted to share something that worked for me when dealing with a similar issue. I was getting nowhere with my retirement plan administrator about a confusing 1099-R until I found Claimyr (https://claimyr.com). They have this service that gets you through to an actual human at financial companies and the IRS without waiting for hours. I was skeptical at first, but there's a video showing how it works: https://youtu.be/_kiP6q8DX5c I used it to finally get through to my annuity provider and had an agent explain exactly why my distribution had a blank Box 2a (similar to your situation - it was non-taxable return of principal). Saved me a ton of stress trying to figure it out myself.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment above, I decided to try it myself since I was desperate to talk to someone at the IRS about a notice I received. The service actually worked exactly as described. I entered my phone number, and about an hour later I got a call connecting me directly to an IRS representative. No waiting on hold, no getting disconnected after an hour of waiting. The agent was able to explain the notice I received and help me understand what documentation I needed to submit. This saved me from potentially paying penalties I didn't actually owe. I'm usually skeptical about these types of services, but I'm genuinely impressed and relieved I gave it a chance.

Just to add something important about annuities - the rule of 72(t) might apply to your situation. Generally, distributions from annuities purchased with after-tax dollars work like this: 1. First, you get back your original investment (non-taxable) 2. Then, once that's fully recovered, any additional distributions are fully taxable as ordinary income It's called the "exclusion ratio" and it sounds like your father-in-law is still in phase 1, getting back his original investment. This is why Box 5 equals the gross distribution and Box 2a is blank.

Don't forget to check if there were any surrender charges on this annuity withdrawal! If the code is 7D and it was taken before the surrender period ended, there might be penalties that aren't reflected on the 1099-R but will impact the actual amount received.