Yes, you should have reported the $25K rollover on your tax return, even though it’s not taxable.
- The IRS considers all rollovers reportable, even if they are tax-free.
- This helps the IRS match your Form 1099-R (which shows the distribution) with your tax return to confirm that the funds were properly rolled over.
Topic no. 413, Rollovers from retirement plans has the information about reportable rollovers.
Yes, it is highly recommended that you file an amended return using Form 1040-X to report the nontaxable rollover. If you did not report the $25K rollover, the IRS might assume it was a taxable distribution, which could trigger a notice or audit. You should clearly state that you are amending the return to report a nontaxable rollover from a 457(b) account to a traditional IRA that was not included on the original return. This will help the IRS understand why you are filing an amendment and will match your records with theirs.
How exactly do I report that on the tax form?
- Line 4a (IRA Distributions): Enter the full amount distributed from the 457(b) plan (i.e., $25,000).
- Line 4b (Taxable Amount): Enter $0.
- Write “ROLLOVER” next to line 4b to indicate it was a nontaxable rollover.
@user17581197005 Thanks for the question!!
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