dmertz
Level 15

Retirement tax questions

The nonzero amount in box 2 implies that code G Form 1099-R from the 401(k) is reporting a rollover from the 401(k) directly to a Roth IRA, which is not what happened.  If your requested that the 401(k) perform a direct rollover to a Roth IRA, then the Form 1099-R reflects what you requested and the deposit of this into a traditional IRA was a mistake.  If you instead requested that the 401(k) plan make the rollover be to a traditional IRA, the 401(k) plan has improperly prepared the Form 1099-R.

 

In either case you'll need to file a substitute code G Form 1099-R showing $0 in box 2a and explaining that the rollover was to a traditional IRA, not to a Roth IRA.

 

The check or transfer for a proper direct rollover specifies the account (or at least the type of account, traditional or Roth) that is to receive the rollover.  However, these often do not specify the account, or if they do the specification is ignored, the rollover ends up in the wrong type of account and the Form 1099-R doesn't reflect that the rollover was deposited into the wrong type of account.