dmertz
Level 15

Retirement tax questions

If you are no longer employed by this employer, even though the rollover might have been done by direct rollover (code G on the Form 1099-R), the lump sum pension distribution included your RMD for the pension and that portion of the distribution was not eligible for rollover to the IRA.  Since you mistakenly rolled that money over to the IRA, that money in the IRA constitutes a regular contribution to the IRA, not a rollover contribution, and is and excess contribution must be returned by an explicit return of contribution, otherwise it is subject to an excess-contribution penalty each year that it remains in the account.

 

Obtaining the explicit return of excess contribution from the IRA may take some explaining to the IRA custodian as to why the portion that was RMD and originally deposited as a rollover contribution does not actually constitute a rollover contribution and must be returned to you.

 

If this IRA did not exist prior to 2019, there is no RMD for this IRA for 2019 and only the excess contribution (assuming that you were not still employed by this employer at the end of 2019) needs to be removed.