1099R bank error

[Greg2017]

I rolled over my IRA on 7/5/17 to another CU which stated "roller" on signed agreement. However, the CU issued me a cashier check on 7/3/17 that I told them was rolled over, but they put it down as "early withdrawal" and marked without federal/state tax withheld.

My 1099R box 1 Gross distribution and box 2a Taxable amount both showed the SAME amount. Box 2b Taxable amount not determined and Total distribution marked "X" and box 7 is code 1. 

Is this the bank error? How do I input my information to 1099R screen? Will Form 5498 sent to IRA from rolled over CU to IRA after May correct it? please advise.

[AnnetteB · Accepted solution]

No, this was not necessarily a bank error.  Even though your Form 1099-R shows that you received an early distribution, as long as you deposited the full amount of your distribution into the same type of IRA at another financial institution within 60 days, your distribution will not be taxable on your return.

Enter your Form 1099-R just as it is written into TurboTax.  Initially, you will see a screen indicating that “you are paying additional tax on your distribution”, but that will be taken care of as you answer the follow-up questions. 

Keep moving forward through the screens until you see the question, “What did you do with the money?” with the choices of moved the money to another retirement account or did something else with it.  Select the option showing that you moved the money to another retirement account and then answer the question that appears below that applies to your situation.  This will take care of determining that your rollover should not be taxable on your return.

Then, when the Form 5498 is issued, the IRS will compare that information with your return and know that the amount was rolled into another IRA and was not just distributed to you for another purpose.