457 Roth

[MooreCE]

I completed a direct rollover from a designated roth 457 account to an individual Roth IRA in 2023.  This should result in a non-taxable distribution.  On the 1099-R that I received:  Box 2a, Taxable Amount, was blank;  Box 2b Taxable Amount not Determined was checked;  and  Box 7, the code H is entered, which I believe means "Direct Rollover of a designated Roth account to a Roth IRA."

This distribution should have a zero taxable amount, but Turbo Tax is determining that the entire distribution is taxable.  Is there a fix, or do I just have to override the Turbo Tax calculations directly on the 1040?

[dmertz · Accepted solution]

The Form 1099-R was incorrectly prepared by the payer.  Code H is correct, but a code-H Form 1099-R must always have a zero in box 2a and box 2b Taxable amount not determined unmarked because such a rollover is never taxable.

Entering a zero in box 2a of TurboTax's 1099-R form will probably correct the problem on your tax return, but ideally the payer should correct the Forms 1099-R.