I had a direct rollover from a Roth 401(k) to a Roth IRA in 2022. When rolled over, the balance was lower than the "cost basis" of the investments in the 401(K).

[jerryhinton]

I was issued a 1099-R with the difference (between the cost basis of investments in the 401(k) and the balance rolled over) in line 5, with code 1B in line 7. 

Is this amount tax deductible for 2022? If so, how would that be reported in my 2022 tax return?

[JulieS]

No, this amount is not deductible. 

Code 1 B means it is an early distribution from a Roth account. You enter the 1099-R in the program and then answer the follow up questions to indicate that it was rolled over. The amount will show on your tax return, but will not be taxable. 

To add Form 1099-R:

1. Select Federal on the left side menu.
2. Under  Wages & Income, find IRA, 401(k), Pension Plan Withdrawals (1099-R).
3. Select Add/ Edit to the right.
4. Answer Yes on the next screen, or if you already have an entry in this section, click Add another 1099-R at the bottom of the screen.
5. Click Continue.
6. Import your form or scroll to the bottom and select Change how I enter my form.
7. On the next screen select, I'll type it in myself.
8. On the next screen select Financial institution or other provider (1099-R)
9. Click Continue.
10. Fill in the next screen with the figures from your form. 
11. Watch for the screen titled, "Tell us if you moved the money through a rollover or conversion" Pick the second answer, "I converted some or all of it to a Roth IRA."
12. Pick the first answer to the next question, "I rolled over all of this money to an IRA or other retirement account."
13. Continue until you finish this section.