2020 indirect rollover from trad IRA to 401K. How do I show the IRS that I rolled the funds into a qualified account and it should not be considered taxable income?

[love-the-irs]

In 2020 I had an indirect rollover from a trad IRA to a 401K. The IRS wants to see a 5498 showing the contribution into a qualified plan. The 401K firm stated they do not issue 5498's for the rollover into the 401K ; they stated the 1099R will show that it was a rollover to a qualified plan. However, the 1099R, line 7 shows code 1, with the IRA box checked. This is consistent with an indirect rollover. The turbo tax process asks: “Did you rollover all of this $ (box 1) to another retirement account?” I checked the box stating “Yes, I rolled over the entire amount to another trad IRA or retirement account.” If I rolled into an IRA, a 5498 would be generated. However, I moved it to a 401K and a 5498 is not generated. How do I demonstrate to the IRS that I rolled the funds into a qualified account and should not be considered taxable income?

[Critter-3]

They want  proof that the funds did make it to the 401K so give them the proof if the 401K administrator says they will not issue a 5498.  You must have some kind of statement showing the funds going into that account.  

[macuser_22]

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@love-the-irs wrote:
In 2020 I had an indirect rollover from a trad IRA to a 401K. The IRS wants to see a 5498 showing the contribution into a qualified plan. The 401K firm stated they do not issue 5498's for the rollover into the 401K ; they stated the 1099R will show that it was a rollover to a qualified plan. However, the 1099R, line 7 shows code 1, with the IRA box checked. This is consistent with an indirect rollover. The turbo tax process asks: “Did you rollover all of this $ (box 1) to another retirement account?” I checked the box stating “Yes, I rolled over the entire amount to another trad IRA or retirement account.” If I rolled into an IRA, a 5498 would be generated. However, I moved it to a 401K and a 5498 is not generated. How do I demonstrate to the IRS that I rolled the funds into a qualified account and should not be considered taxable income?

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401(k)'s do not generate a 5498, only IRA's do.   You can provide your 401(k) quarterly statement that should show the rollover amount.

[dmertz · Accepted solution]

Because there is no way for a 401(k) plan to report to the IRS that a rollover was received, it's common for the IRS to question an indirect rollover from an IRA to a 401(k).  As macuser_22 said, the IRS generally requires evidence in the form of a copy of a transaction confirmation or an account statement showing that the rollover deposit was made to the 401(k).

[SweetieJean]

Did you do the rollover within 60 days?