Entered 1099-R for pre-tax IRA rollover with Box 7 code G and IRA/SEP/SIMPLE checked. This should allow a pre-tax rollover but Turbotax says its wrong.

[ehaberlin]

Turbotax indicates this code and IRA/SEP/SIMPLE checked is converting a pre-tax IRA to Roth IRA.  I cannot get it to accept this simple IRA pre-tax rollover.

[Critter-3]

Delete the 1099-R and enter it again from scratch ... then make sure box 2a is left blank and answer all the follow up questions in that section. 

[dmertz]

This is a bogus message from TurboTax that many people have complained about.  Ignore it.  A code-G Form 1099-R with the IRA/SEP/SIMPLE box marked indicates a rollover from an IRA to an employer plan, never anything to do with a Roth IRA.  TurboTax should just be asking you to confirm your entries because a rollover from an IRA to an employer plan is less common than other types of rollovers reported with code G.

[Critter-3]

@ehaberlin 

You said you rolled a "pre tax IRA"  to a ROTH  so was this a traditional IRA  with basis that you converted to a ROTH ?      Or a Roth 401K rolled to a ROTH ? 

Code G is normally used when you roll the same type of plan to the same type of plan  and is not a conversion. The program will handle a code G perfectly if it was a roll over  but not if it was a conversion ... that would not be the correct code for that.

Please explain further.  

[dmertz]

Code G with the IRA/SEP/SIMPLE box marked reports a rollover from a traditional IRA to a traditional account in a plan like a 401(k).  It has nothing to do with any kind of Roth account, so TurboTax's message is nonsense.

[blinkypanama]

My 1099-R from Fidelity has the same, box 7 code G and IRA/SEP/Simple box checked. In my particular case, I am converting to a ROTH IRA from a Rollover IRA. TT doesn't like the codes and says,

You indicated that you converted a traditional IRA to a Roth IRA with Code G in Box 7. However, if this is true it should have Code 1, 2, or 7 instead.

If the money you took out isn’t from a traditional IRA, then the IRA box should not be checked. 

So my question is, is the 1099-R I received incorrect?

[ColeenD3]

These are two separate actions. Action 1 is a rollover and does get a code G. A conversion takes place afterward and does not get treated as a rollover. You have to pay the tax on converting a pretax Traditional IRA to an after-tax Roth. Did you only get one 1099-R covering both transactions?

[blinkypanama]

Yes, I only got one 1099-R from Fidelity for this rollover. Does the conversion to a ROTH IRA happen at the new institution? I received no documents from them and none are available in my online account with them. The new company is iTrust capital.

[DianeW777]

It seems a second Form 1099-R should have been received when the traditional was converted to a Roth after the rollover. You should be sure the traditional IRA was converted to a Roth IRA after the rollover to confirm they followed your direction.

Next, change the code to a 2 (known exception to penalty) and then answer the Roth question. This will tax the distribution correctly as it should. Keep your records of the Roth even if you need to print from your online account. See the screen image below.

[blinkypanama]

Ok, I changed the code to 2 from G. Since this is different from the original 1099-R I received do I need to check "I need to file a substitute 1099-R"?

[JohnB5677]

Log back into your 1099-R

1. Enter 7 in Box 7
2. Do you have info in Box 2a or Box 2b? = Yes/No
3. Do any of these situations apply to you? = None of these apply
4. How much of the $XX, XXX was an RMD? = None of this withdrawal was a RMD
5. Tell us if you moved the money through a rollover or conversion = I converted some or all of it to a Roth IRA
6. Continue the interview