@Katie_B Token 709893. This file has only one real entry, a code G Form 1099-R reporting an In-plan Roth Rollover that is completely nontaxable due to the funds being all after-tax funds in the 401(k). Observe that the ROLLOVER indication is missing from Form 1040 line 5b. Note that if the marking of box B7 of TurboTax's 1099-R form is removed (implying that the rollover was to a traditional IRA or to a traditional account in another qualified retirement plan) the ROLLOVER indication appears. Nothing in the IRS instructions for line 5b says that the ROLLOVER indication is to be omitted regardless of the destination account type.
Perhaps the developers were confused by inconsistent terminology usage. TurboTax refers to movement of funds from a traditional account in a qualified retirement plan to a Roth account as a conversion even though the term "conversion" in the tax code applies exclusively to movement of funds from a traditional IRA to a Roth IRA. Roth conversions reported on lines 4a and 4b are not to get the ROLLOVER indication. The IRS really made things inconsistent between what is to be done on lines 4a and 4b and what is to be done on lines 5a and 5b. Taken as a whole, the IRS instructions for all of these lines are pretty incomprehensible, making it difficult to design software to correctly handle all of the possibilities. However, they are pretty clear if you just follow them through for a particular example like this one, and for any kind of rollover from a qualified retirement plan the word ROLLOVER is to be present. The type of destination account doesn't matter. Any movement of funds from a qualified retirement plan to any type of qualified retirement account is a rollover.
This bug also affects the reporting if the destination account is a Roth IRA instead of the designated Roth account in the plan and for indirect rollovers with code 1, 2 or 7 (to a Roth IRA, indirect IRRs are generally not done).
