After I retired, I move my 401(K) directly to an IRA (FBO check). 1099-R shows non-taxable and code "G". Why does it show as part of total income?

[Oldblue]

I am concerned about IRMAA implications as this greatly inflates my income. If I had left it at employer, this would not be flagged. My understanding is that as long as it went directly to the new custodian/institution it would essentially be a simple transfer with no effect other than consolidation of investments into non employer based intruments. Why does this show up as income?

[SteamTrain · Accepted solution]

@Oldblue 

It should show up in the menu summary amounts as income $$ that you "entered" into the software

But

....if you look at your actual form 1040, your line 5b $$ amount should be lower than line 5a, and the "rollover" box  (5c) should be checked.

IF those same $$ are included on line 5b, then perhaps you indicated it went into a ROTH IRA.....if you did xfer to a ROTH IRA.... then those $$ do become taxable.

[Oldblue]

Thanks for confirming this. Yes, IRA and not Roth was / is selected. 

Pointing to those specific lines helps clarify this. 

[NCperson]

@Oldblue IRMAA is based on Line 11 plus Line 2a. 

Since the code is "G", the dollar amount will be in box 4a. but not 4b.