Form 1099-R - Dividends Distributed from an ESOP
1

If you have a Code U in Box 7, you will not use Code 1 Early Distributions - No Known Exception with Code U Dividends Distributed from an Employee Stock Option Plan (ESOP). Distributions from a ESOP are not subject to a 10% additional tax.

Code B is the only code that can be used in combination with Code U. Code B should be used when the account is a designated Roth account.