If you defaulted on a 401k loan, you can repay it back up to you tax filing. I received a 1099R with 1L distribution code. Where in turbotax do you enter the repayment?

[MinhT1]

You can avoid the immediate income tax consequences by rolling over all or part of the loan’s outstanding balance to an IRA or eligible retirement plan by the due date (including extensions) for filing the Federal income tax return for the year in which the loan is treated as a distribution. This rollover is reported on Form 5498.

Please read this IRS document for more information.

When you rolled over as above, in TurboTax, after entered your form 1099-R, please indicate that you rolled over to another retirement account when asked What did you do with the money? in the TurboTax interview.

[adelzer6]

That is what I read online as well for previous tax years, however that question is not asked for the 2019 filing. After entering the 1099 it says your paying extra tax on this money but we will help look for exceptions. It then goes on to ask if it came from public safety officer employment, qualified disaster, 2016/2017 hurricane. There is nothing that asks if I rolled over the funds. I have spent hours on this. I can enter a substitute 1099? The issue is that the 1099R i received saying it defaulted is wrong. 

[dmertz]

Code 1L reports a deemed distribution which is not eligible for rollover, so TurboTax knows not to ask if you rolled it over.  If you had instead received an offset distribution after separation from service with this employer rather than having defaulted on the loan, the Form 1099-R would have code 1M which would indicate a distribution that is eligible for rollover.  A deemed distribution does not satisfy the loan, it just causes it to be immediately taxable and the loan is still required to be repaid, with repayments becoming after-tax basis in the 401(k).

If you deposited this amount into an IRA, it is a regular contribution, not a rollover contribution.  Regular contributions in excess of the amount that you are eligible to contribute for the particular year are subject to a 6% excess-contribution penalty each year until properly removed or applied as part of a subsequent year's contribution that you are eligible to make.

If you actually had separated from service before failing to repay the loan, the plan should have reported it as an offset distribution rather than a deemed distribution and you should contact the plan to obtain a corrected Form 1099-R.