CalSavers Tax Forms: 5498, 1099-R, 5329, and 8880

CalSavers sends participants two tax forms each year: Form 5498, which reports your contributions, and Form 1099-R, which reports any withdrawals of $10 or more.¹ Depending on what you did with the account during the year, you may also need to file Form 8606 to track Roth IRA basis, Form 5329 to report an early withdrawal penalty or excess contributions, or Form 8880 to claim the Saver’s Credit. Because a CalSavers account is an individual retirement account, every piece of tax reporting follows standard IRS rules for Traditional and Roth IRAs.

Why Your CalSavers Contributions Are Not on Your W-2

This is the first thing to check when you sit down with your return. CalSavers contributions do not appear on your W-2, and the retirement plan checkbox on the form is left unchecked.² A 401(k) reduces your reported wages by the amount you defer; a payroll-deduction IRA does not. Your employer sends your full wages to the IRS, and the CalSavers payroll page confirms that contributions are deducted after taxes and are “not reportable on W-2s.”³

That changes what you do on your return. If you kept the default Roth IRA, your contributions were already after-tax and there is nothing to deduct. If you switched to a Traditional IRA and want to deduct your contributions, you claim the deduction yourself on Schedule 1 of Form 1040. Your employer plays no role in that calculation.

Form 5498: Your Contribution Record

Form 5498 is the official record of what went into your CalSavers account during the year. The administrator sends it to both you and the IRS, and it shows your total Traditional or Roth IRA contributions, your year-end fair market value, and, for older participants, whether a required minimum distribution is due.¹

Here is the timing problem. Form 5498 does not arrive until May 31 of the following year, well after the April filing deadline.⁴ You cannot wait for it to file your return. Use your pay stubs or your CalSavers online account to report contributions when you file. Form 5498 serves as the IRS’s confirmation to match against what you claimed.

One quirk worth noting: you can make IRA contributions for the prior tax year up until the April filing deadline. Any contribution you make between January 1 and mid-April that you designate for the previous year will appear on that year’s Form 5498, not the current year’s.

If You Chose the Traditional IRA

You may be able to deduct your contributions on your federal return. Because CalSavers is not treated as an employer-sponsored retirement plan for tax purposes, the standard workplace-plan phase-outs do not apply to you directly. If your spouse is covered by a retirement plan at work, your deduction begins phasing out at $242,000 of modified adjusted gross income and disappears at $252,000 for married couples filing jointly in 2026.⁵ If neither you nor your spouse has a workplace plan, the full deduction is available regardless of income.

If You Kept the Default Roth IRA

Roth contributions are never deductible, so Form 5498 has no immediate effect on your tax return. Keep it anyway. It is the running record of your basis, meaning the after-tax contributions you have put into the account over the years. Basis is what lets you withdraw your own contributions tax-free and penalty-free at any time, and it is what Form 8606 uses to determine the taxable portion of any later withdrawal that includes earnings.⁶

Watch the Roth income limits. For 2026, the ability to contribute to a Roth IRA phases out between $153,000 and $168,000 for single filers and between $242,000 and $252,000 for married couples filing jointly.⁵ Above those ranges, any Roth contribution becomes an excess contribution.

Form 1099-R: Reporting Withdrawals

Any distribution of $10 or more from your CalSavers account triggers a Form 1099-R from the administrator, delivered by January 31 of the year after the withdrawal.¹ Box 1 shows the gross distribution, Box 2a shows the taxable portion, and Box 7 carries a code describing the nature of the distribution.⁴ The code is what the IRS reads to decide whether the 10% early withdrawal penalty applies.

Traditional IRA Withdrawals

Traditional IRA withdrawals are taxed as ordinary income because the money went in pre-tax. You report the taxable amount on Form 1040. If you took the money out before age 59½, a 10% early withdrawal penalty generally applies on top of the regular income tax.⁷ The Box 7 codes you are most likely to see:

Code 1: early distribution before age 59½ with no known exception, which triggers the 10% penalty unless you claim an exception on Form 5329.
Code 7: normal distribution after age 59½, no penalty, just regular income tax.
Code G: direct rollover to another qualified plan or IRA, no tax or penalty.

Roth IRA Withdrawals

Roth withdrawals are more complicated because different portions get different treatment. Your original contributions come out first, always tax-free and penalty-free. The taxable questions begin only when you dip into earnings.

A withdrawal of Roth earnings is tax-free only if it is a qualified distribution. That requires two things: the account must have been open for at least five tax years (starting January 1 of the year of your first Roth IRA contribution), and you must be at least 59½, permanently disabled, or taking the money as a beneficiary after the account holder’s death. The Box 7 codes for Roth IRAs are different from the Traditional codes:⁴

Code J: early distribution from a Roth IRA with no known exception. Any earnings in the distribution may be subject to income tax and the 10% penalty.
Code T: distribution where an exception applies but the custodian cannot confirm the five-year holding period has been met.
Code Q: qualified distribution, entirely tax-free.

If you receive a Code J and the distribution includes earnings, you complete Part III of Form 8606 to calculate the taxable portion.⁶ Your tracked basis from past Form 5498s is what makes that calculation possible. Earnings withdrawn before the five-year period ends are taxable even if you are over 59½.

Form 5329: Penalties and Exceptions

Form 5329 does two separate jobs for CalSavers participants.

Claiming an Exception to the 10% Early Withdrawal Penalty

If your 1099-R shows Code 1 or Code J, the IRS presumes you owe the 10% penalty. If you qualify for an exception, you file Form 5329 to override that presumption. On Line 2 you enter the amount that qualifies and the corresponding exception number.⁸ Common exceptions include:

Exception 03: total and permanent disability.
Exception 09: first-time home purchase, up to $10,000 lifetime.
Exception 19: qualified birth or adoption distribution.

The full list of exception codes runs from 01 through 23. If more than one exception applies to the same distribution, you enter 99.⁸

The 6% Penalty on Excess Contributions

For 2026, the combined contribution limit across all your Traditional and Roth IRAs is $7,500, or $8,600 if you are 50 or older.⁵ That cap applies across every IRA you own; a CalSavers Roth plus a Traditional IRA at a brokerage share the same ceiling. A Roth contribution made while your income exceeded the phase-out range is also an excess contribution. In either case the IRS charges a 6% excise tax on the excess for every year it stays in the account.⁹

You can avoid the penalty by withdrawing the excess and any earnings on it before your tax filing deadline, including extensions. If you miss that window, you report and pay the 6% tax on Part III (Traditional IRA) or Part IV (Roth IRA) of Form 5329.¹⁰ When the administrator processes a corrective distribution, the resulting 1099-R carries Code 8 (if the excess was withdrawn in the same year it was contributed) or Code P (if withdrawn the following year but before the tax filing deadline).⁴

CalSavers makes this trap easier to fall into than most. The default savings rate starts at 5% of gross pay and increases by 1% each year until it reaches 8%, unless you change it.¹¹ Your contributions can creep above the annual limit without any warning, especially if you also contribute to an IRA outside CalSavers. Check your running total before year-end.

Form 8880: The Saver’s Credit

Lower-income CalSavers participants may qualify for the Saver’s Credit, a federal tax credit that directly reduces the tax you owe. The credit is worth up to $1,000 for single filers or $2,000 for married couples filing jointly, and you claim it on Form 8880.¹² The rate depends on your adjusted gross income and filing status. For 2026:⁵

Single: 50% credit up to $24,250 AGI; 20% up to $26,250; 10% up to $40,250; no credit above $40,250.
Head of household: 50% up to $36,375; 20% up to $39,375; 10% up to $60,375; no credit above $60,375.
Married filing jointly: 50% up to $48,500; 20% up to $52,500; 10% up to $80,500; no credit above $80,500.

The credit is nonrefundable, so it can take your tax bill to zero but will not generate a refund on its own.¹³

Required Minimum Distributions

Traditional IRA holders must begin taking required minimum distributions once they turn 73. The first RMD is due by April 1 of the year after you turn 73; every RMD after that is due by December 31.¹⁴ Form 5498 flags this in Box 11, and the calculated amount, if provided, appears in Box 12b. If Box 12b is blank, the custodian must provide the calculation in a separate statement by January 31.¹⁵ Roth IRAs are exempt from RMDs during the account owner’s lifetime.

What Changes on Your California Return

California generally follows federal rules for IRA deductions and Roth treatment, but the state’s conformity date lags behind federal law and it has not adopted every change from the SECURE Act and SECURE 2.0 Act. Two differences matter for CalSavers participants:

California does not allow Traditional IRA contributions for taxpayers age 70½ or older, even though federal law now permits them. If you deducted a Traditional IRA contribution on your federal return in that age range, add it back on your California return.
California has not adopted the inflation indexing of the IRA catch-up contribution. For 2026 the federal catch-up is $1,100, bringing the total to $8,600 for those 50 and older, but California may only recognize the pre-indexed $1,000 catch-up for state purposes.

For Roth participants, California generally treats qualified distributions as tax-free, in line with federal rules. You do not receive a separate state-level tax form for your CalSavers account.

If You Enrolled Directly, Not Through an Employer

CalSavers is open to independent contractors and self-employed individuals who enroll directly through the CalSavers website, provided they are at least 18, have earned income, and have a bank account for contributions.¹ The tax forms are the same: Form 5498 for contributions, Form 1099-R for distributions. The only difference is that no employer is involved, so there is no W-2 interaction at all. You report your Traditional IRA deduction, or track your Roth basis, the same way any other self-employed filer would on Form 1040.

1
CalSavers. Frequently Asked Questions
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Internal Revenue Service. Payroll Deduction IRA
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CalSavers. Payroll Help Center
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Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498
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Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
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Internal Revenue Service. Instructions for Form 8606
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Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
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Internal Revenue Service. 2025 Instructions for Form 5329
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Internal Revenue Service. Retirement Topics – IRA Contribution Limits
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Internal Revenue Service. Form 5329 Additional Taxes on Qualified Plans
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California Employment Development Department. CalSavers Retirement Savings Program
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Internal Revenue Service. Retirement Savings Contributions Credit (Saver’s Credit)
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Internal Revenue Service. Form 8880 Credit for Qualified Retirement Savings Contributions
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Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
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Internal Revenue Service. Form 5498 IRA Contribution Information