2024 1099-R:I did a recharacterization in 2024 of a 2023 traditional IRA contribution $6K to a Roth contribution. Box shows 3,830.57, 2a & 2b are blank. What do I do?

[court-haag25]

Box 1 shows $3,830.57. Boxes 2a and 2b are blank. Box 7 code - R. IRA/SEP/SIMPLE box is blank.

[DaveF1006]

Your Form 1099-R is reporting a recharacterization of your 2023 Traditional IRA contribution to a Roth IRA, which was completed in 2024. Here's how to handle this:

1. Box 1 Amount: The $3,830.57 in Box 1 represents the amount recharacterized, including any earnings or losses on the original $6,000 contribution. This is the amount you need to report.
2. Box 2a and 2b Blank: Since this is a recharacterization, Boxes 2a and 2b are blank because the recharacterization itself is not taxable.
3. Box 7 Code R: The "R" code indicates a recharacterization of a prior-year contribution. This confirms that the recharacterization applies to your 2023 contribution.

So you are reporting the recharacterization, but it won't be taxable to you.

[dmertz · Accepted solution]

If your filed 2023 tax return already reflects the recharacterization by not showing any traditional IRA contribution on Schedule 1 or Form 8606 and your Roth IRA contribution basis carried into 2024 TurboTax includes the resulting $6,000 Roth IRA contribution, there is nothing that you need to do and you can ignore the code R 2024 Form 1099-R.

[danikni]

Hi Dave,

I recharacterized my IRA contributions from Traditional to Roth in 2023 and 2024 (both years, I expected contributions to my Trad IRA to be tax-deductible, but income was slightly too high for a deduction). For 2023 and 2024, I did the recharacterization before filing, so there are no changes to my taxable income.

Including the 2024 1099-R (for the 2023 recharacterization) on my 2024 filing is causing a Form 8606 to be generated. This is incorrect according to the instructions on the form (in bold below): 

Complete this part only if one or more of the following apply.
• You made nondeductible contributions to a traditional IRA for 2024.
• You took distributions from a traditional, traditional SEP, or traditional SIMPLE IRA in 2024 and you made nondeductible contributions to a traditional IRA in 2024 or an earlier year. For this purpose, “distributions” does not include rollovers (but does include certain 2024 retirement plan distribution repayments treated as rollovers (see instructions)). Also, it does not include qualified charitable distributions, one-time distributions to fund an HSA, conversions, recharacterizations, or returns of certain contributions.
• You converted part, but not all, of your traditional, traditional SEP, and traditional SIMPLE IRAs to Roth, Roth SEP, or Roth SIMPLE IRAs in 2024 and you made nondeductible contributions to a traditional IRA in 2024 or an earlier year.

How can I eliminate this form from my filing?

[DanaB27]

It sounds like you entered a conversion instead of a recharacterization. Please see What are IRA conversions and recharacterizations? for additional information.

To clarify, do you have code R (for the 2023 contribution) and N (for the 2024 contribution) in box 7 for the recharacterization? Recharacterizations are entered in the IRA contribution interview. 

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions” 
3. Click on “Jump to IRA contributions"
4. Select “Traditional IRA”
5. Answer ‘Yes” on the “Roth IRA Contribution” screen
6. Answer “No” to “Is This a Repayment of a Retirement Distribution
7. Enter the Traditional IRA contribution amount 
8. Answer “Yes” to the recharacterized question on the “Switch from a Traditional To a Roth IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
9. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.

@danikni

[danikni]

@DanaB27

Thank you so much for your response. The 2024 Form 1099-R has an R in box 7 (no N).  I am sure that I chose “recharacterization” instead of “conversion;” however, perhaps I did not give accurate responses as you listed. If I correct these, will it update the IRA worksheet, or may I update it manually? 

[DanaB27]

You can delete the 2024 Form 1099-R with code R from your 2024 return since it technically belongs on the 2023 return. But a Form 1099-R with code R will change nothing on your return. You can only report it as mentioned below. Therefore, you can ignore the Form 1099-R with code R.

Code R indicates you only recharacterized the contribution for 2023 in 2024. Therefore, you should have entered on your 2023 return:

1. Click on "Search" on the top right and type “IRA contributions” 
2. Click on “Jump to IRA contributions"
3. Select “Traditional IRA”
4. Answer ‘Yes” on the “Roth IRA Contribution” screen
5. Answer “No” to “Is This a Repayment of a Retirement Distribution
6. Enter the Traditional IRA contribution amount 
7. Answer “Yes” to the recharacterized question on the “Switch from a Traditional To a Roth IRA?” screen and enter the contribution amount (no earnings or losses) on the next screen.
8. TurboTax will ask for an explanation statement where it should be stated that the original $xxx.xx plus $xxx.xx earnings (or loss) were recharacterized.

@danikni