1099R 1M (qualified loan offset) rollover deadline

[LAW123]

I have a 401K loan from a previous employer. The loan is considered a qualified loan offset as I left my company in 2025. The 1099R I received from my previous 401K shows code 1M and it shows the remaining loan amount and taxable amount (same as remaining loan amount). I could not pay off the loan in the 90 days required. So I've been saving money to roll in to an IRA so I can avoid taxation and penalty. Now that I have the loan amount can I roll it in to an IRA before April 15th 2026 to avoid taxes/penalties?  How do I show this on my W4 as the amount is being put in an IRA in 2026. I'm slightly confused on the information out there, some say I had 60 days but others say since its a qualified loan offset I have until tax deadline of the following year (meaning 2026).

[DavidD66]

You have at least until April 15, 2026 to rollover a distribution of a Qualified Plan Loan Offset (QPLO).  According to the IRS: 

IRC Section 402(c)(3)(C)(i) provides that a distribution of a QPLO may be rolled over by the participant (or spousal distributee) to an eligible retirement plan by the individual's tax filing due date (including extensions) for the taxable year in which the offset is treated as distributed from a qualified employer plan. The individual can obtain a six-month extension of time to complete the rollover (typically from April 15 to October 15) by obtaining an extension of time to file his or her individual income tax return.

For more information see the following IRS article:  Plan loan offsets

[LAW123]

Thank you. How do I indicate the rollover on my tax form and that it was completed before April 15th? Are there additional forms needed?

[DavidD66]

No, there are no additional forms required.  After you enter your Form 1099-R, there will be a series of questions.  Continue through ALL of the questions and make sure you answer the question "What Did You Do With The Money From [Retirement Plan]"? Be sure you indicate that you "rolled over all of this money to an IRA or other retirement account (or returned it to the same account)."  Indicate you have even if you have not, but make sure you do rollover the money into an IRA or other retirement plan.  

[Opus 17]

Be aware that if you file early, and say you completed the rollover, but then fail to in fact complete the rollover by even one day, you will need to file an amended return and could owe interest and penalties on the taxes not paid by April 15.  Make sure that when you make the payment, you leave enough extra business days for the receiving plan to process the transaction before the 15th. 

[LAW123]

Thank you! I plan to do the rollover this week so a couple months before deadline.