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ianw16
New Member

401k rolled over to a Roth IRA, never taxed on the amount

My wife had a 401k from her prior job, after leaving the company she had the 401k rolled over into her Roth IRA plan.  The company didn't withhold the 20% tax so I need to find out what I need to do to correct this.
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Accepted Solutions
dmertz
Level 15

401k rolled over to a Roth IRA, never taxed on the amount

The Form 1099-R is reporting a rollover to a traditional IRA, not to a Roth IRA.  If this Form 1099-R had been reporting a rollover to a Roth IRA, box 2a would show the same amount as is in box 1.  This seems to be a common issue this year.

You must request that the 401(k) plan correct the Form 1099-R.  If you actually requested that they initiate a rollover to a Roth IRA, they should comply, but often times will not.  If they believe that you requested a rollover to a traditional IRA, they will almost certainly refuse to correct the Form 1099-R.  If they will not correct the Form 1099-R, your only alternative will be to submit a substitute Form 1099-R showing the same amount in box 2a as is in box 1, explain your attempts to get the 401(k) plan to correct the Form 1099-R, and explain why the original Form 1099-R is incorrect.  (I believe that this will prevent you from e-filing.)

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4 Replies
dmertz
Level 15

401k rolled over to a Roth IRA, never taxed on the amount

What is the code in box 7 of the Form 1099-R provided by the 401(k) plan?
Is the IRA/SEP/SIMPLE box marked?
Is the amount in box 2a zero, nonzero or blank?
Is box 2b Taxable amount not determined marked?
Is there any amount shown in box 5?
ianw16
New Member

401k rolled over to a Roth IRA, never taxed on the amount

Box 7 is code G
IRA/SEP/SIMPLE box is not marked
Box 2a is $0.00
Box 2b Taxable amount is not marked, total distribution is marked.
Box 5 is blank
dmertz
Level 15

401k rolled over to a Roth IRA, never taxed on the amount

The Form 1099-R is reporting a rollover to a traditional IRA, not to a Roth IRA.  If this Form 1099-R had been reporting a rollover to a Roth IRA, box 2a would show the same amount as is in box 1.  This seems to be a common issue this year.

You must request that the 401(k) plan correct the Form 1099-R.  If you actually requested that they initiate a rollover to a Roth IRA, they should comply, but often times will not.  If they believe that you requested a rollover to a traditional IRA, they will almost certainly refuse to correct the Form 1099-R.  If they will not correct the Form 1099-R, your only alternative will be to submit a substitute Form 1099-R showing the same amount in box 2a as is in box 1, explain your attempts to get the 401(k) plan to correct the Form 1099-R, and explain why the original Form 1099-R is incorrect.  (I believe that this will prevent you from e-filing.)

dmertz
Level 15

401k rolled over to a Roth IRA, never taxed on the amount

The assumption here is that the rollover was directly from the 401(k) to the Roth IRA.  If she rolled directly from the 401(k) to a traditional IRA first, then converted the traditional IRA to Roth, she would receive a Form 1099-R from the traditional IRA for the distribution and conversion to Roth and it would be this Form 1099-R that would be reporting the taxable conversion.
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