It is taxable to the extent of the earnings included in the distribution. Box 2a of the Form 1099-R should show the amount of the taxable earnings which you should see included on Form 1040 line 16b or Form 1040A line 12b. The amount shown in box 5 of the Form 1099-R is the after-tax portion that you should see excluded from the amount on line 16b or 12b. The word ROLLOVER should be present next to the line.
