How do I file if my 1099-Rs are coded incorrectly?

Forum|Forum|6 years ago
May 1, 2020
13 replies
55 views

I withdrew from my Roth IRA a few times in 2019. I have had the account over 5 years, I am in my 30s, and I only withdrew contributions, so these withdrawals are not taxable and there's no penalty. When making the distributions/withdrawals, I chose the wrong box on the form online for some of them (apparently) and now my financial institution refuses to issue corrected forms since it was my mistake and not theirs.

So my questions are:

1) Should these withdrawals be coded as J? If not, what code?

2) If they should be coded as J (one form from my financial institute is J, and one is T), do I:

a) File the incorrect 1099-R, correct 1099-R, AND form 4852?

b) File the one correct 1099-R (if J), and only use form 4852 to replace the incorrect 1099-R?

c) File only form 4852, effectively combining both the incorrect and correct (if J) 1099-R into one?

3) If I do need to file form 4852, do I put the taxable amount for 2a as $0, or do I check the box for taxable amount not determined like my how original 1099-Rs were filled out?

Thank you! Happy to provide additional info if needed.

Not A Product Question

macuser_22

Alumni - Champ

Is the code Q from an inherited Roth IRA? Or are you totally disabled?

If not, then it is clearly wrong since you are not over age 59 1/2.

You should tell the account trustee that they must have your age wrong and then need to correct the 1099-R with a code J as it should be.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

ZypherAuthor

Level 2

I’ll edit the original post - I just double checked and it was T, not Q. I’m sorry for the confusion.

They have my age correct and I am not currently on SSID or considered disabled as of now - that may change but right now it’s not the case.

The financial institute has refused to make any adjustments to the 1099-R as any of the indicators that would be incorrect, were inadvertently added by me at the time of withdrawal - they don’t list the codes, just the circumstances. But no matter what, I’m not getting a corrected form from them. So I either need to a) file the incorrect forms and tell the government they’re not right and none of it is taxable, b) file a new form to correct the 1099-R with T, or c) combine both the incorrect and correct one onto a single corrected 1099-R.

dmertz

Level 15

Since you are under age 59½, the only legitimate reason that a financial institution should use code T for a distribution paid to you from a Roth IRA is if the distribution is from an inherited Roth IRA maintained for you as beneficiary. How was this Roth IRA established; was it established by transfer from another retirement account or was it established by a cash deposit of a new contribution?

Assuming that this is not an inherited Roth IRA, entering the code T Form 1099-R into TurboTax and telling 2019 TurboTax that you did not have a Roth IRA before 2015 (even though you did), and also making sure that you don't enter and basis in Roth IRA conversions for years prior to 2015, will cause TurboTax to include the code T distribution on Form 8606 along with the code J distribution and will result in a correct tax return and correct tracking of your Roth IRA basis. You could then move this Roth IRA to another custodian (possibly by indirect rollover to eliminate any possible undesirable coordination between custodians that might cause the incorrect coding to be propagated to the new custodian) to eliminate the uncooperative custodian from the picture. It's possible, but unlikely, that the IRS would question the code T distribution being included on Form 8606. To avoid that small possibility you would have to file a substitute Form 1099-R (Form 4852) and use the correct code J. Filing a substitute Form 1099-R will require mailing your tax return.