A direct rollover from one 401(k) to another involves is a distribution from the old 401(k) paid directly to the new 401(k) account. The process generally should begin with the new plan as you have done, allowing the new plan to specify to the old plan the actual account to which the funds are to be paid. The old plan then makes a distribution payable to that account, either by funds transfer or by issuing a check made payable to that account which can be sent directly to the new plan or can be sent to you for delivery to the new plan. In any event, with a direct rollover the funds are not made payable to you, but are instead paid to the new plan for your benefit. The transaction is reported by the old plan on a Form 1099-R for the year in which the distribution from the old plan occurs and is reportable on your tax return for that year. On your tax return the direct rollover to the new 401(k) will be shown as nontaxable.
