Form 1099-R box guide
Box 5: Employee contributions or insurance premiums
After-tax contributions or certain recoverable costs included in the payment.
What this box tells you
After-tax contributions or certain recoverable costs included in the payment.
How to use it
Do not subtract it twice; use the plan’s tax-free recovery method when Box 2a is not final.
Where Box 5 flows on your return
Box 5 does not have its own Form 1040 line — it is an input used to calculate the taxable amount that lands on Line 4b or 5b. If Box 2a already reflects Box 5 (the payer already subtracted it for you), you do not subtract it again.
How Box 5 works
Box 5 can represent one of several things depending on the plan: after-tax employee contributions being recovered tax-free, designated Roth account basis, the cost of current life insurance protection included in a distribution, or, for some plans, the nontaxable portion of a distribution already reflected elsewhere on the form.
For pensions, the after-tax basis in Box 5 is recovered using the Simplified Method, which spreads your basis evenly across your expected number of payments rather than letting you exclude it all in the first year. For 401(k)/403(b) plans, a lump-sum cash-out can return the entire after-tax basis at once.
Worked example
Linda's pension paid $8,000 during the year. She contributed $6,000 after-tax to the plan over her career, and the Simplified Method spreads that basis across 260 expected monthly payments — about $23 excluded per payment, or roughly $277 for the year. Box 5 shows the year's excluded amount ($277), and Box 2a shows $8,000 minus $277 = $7,723 as taxable.
Put the boxes together
The taxable result depends on more than one field. Use the calculator to combine gross distribution, taxable amount, withholding, contributions, rollover, QCD, age, and distribution code.
Open the 1099-R calculatorFrequently asked questions
Do I subtract Box 5 from Box 1 myself?
Only if Box 2a was not already calculated for you. If Box 2a is populated and Box 2b's "not determined" box is not checked, the payer has already applied the Box 5 recovery — do not subtract it again.
Is Box 5 the same for every year I receive this pension?
For payments using the Simplified Method, the recovered basis amount is usually a level dollar figure per payment until your full after-tax basis is recovered, after which Box 5 typically drops to zero and the full distribution becomes taxable.
Can Box 5 include life insurance costs?
Yes — for certain employer plans that included life insurance protection, Box 5 can report the cost of that current life insurance protection, a different concept from after-tax contribution basis that uses the same box.
Sources
Related Calculators
1099-R Tax Calculator
Retirement distribution tax, rollover and QCD exclusions, withholding, and possible 10% additional tax
1099-R Distribution Codes
Box 7a distribution code list with the usual income-tax, rollover, Roth, beneficiary, QCD, and penalty treatment
Early Withdrawal Penalty
10% pre-59½ + income tax, first-home exception, SEPP 72(t)