I know next to nothing about nonQ plans, but an accountant just called me with a question and I'm interested to know the correct answer.

An insurance agent worked for an insurance company and deferred compensation back in the 1980s. He elected a 10 year payout of the deferred comp 9 years ago, and received a 1099-R with code 7 for the first 8 years. He got another 1099-R for the 9th year, but it had code 1. (He's 55 now.)

Insurance co. insists code 1 is correct.

My meager knowledge indicates that he should be getting paid on a W-2, not a 1099-R. (The 1099-R instructions say to use a 1099-R only if it is a commercial annuity...I guess it could be, but what's the correct code in that situation?)

Any thoughts?

Correct, Nonqual plans should be reported on W-2

I think that only govt 457 plans are reported on 1099- R b/c they can be rolled over to IRA. All other NQDC plans are reported on w-2.

Thanks!

Many insurance agents are considered independent contractors, in that case wouldn't the correct reporting be on a 1099-MISC?