Is distribution code G on a 1099-R correct, for a direct rollover from one retirement plan to another (no Roth IRA involved)? I am receiving error message. Please assist!

[prietofamily]

I received a 1099-R for a rollover. No Roth IRAs were involved. Turbotax is giving me an error message saying "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.
If you need to make changes, select Back. If this matches exactly what’s on your form, we recommend you contact your provider to correct it." However, I believe Code G and the IRA box being checked are correct, since I indeed did a direct rollover from one retirement plan to another. Not sure if maybe there's an error in the TurboTax system, or if I'm misunderstanding something and there's indeed an error on my 1099-R... Thank you for any assistance with this!

[DanaB27]

Please review the follow-up questions after you enter the 1099-R carefully. Since you did not move the funds into a Roth IRA please review this question:

1. On the "Did you move the money to a Roth IRA?" screen answer "No"

When you answer "no" TurboTax will know that it was moved from one traditional IRA into another traditional IRA.

[Edited 1/31/2022 | 6:20 am PST]

[prietofamily]

Thank you 🙂  
On the screen "Did you move the money to a Roth IRA?"

Indeed, I marked "No, I didn't"

Then it brings me to a page that says this (pasted below in its entirety), which is why I'm wondering if there might be an error in the TurboTax system.

"Double check Box 7 and the IRA box on your 1099-R

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.

If you need to make changes, select Back. If this matches exactly what’s on your form, we recommend you contact your provider to correct it.

How will this impact my return"

[prietofamily]

Also this question that you mentioned never appears for me:

1. On the "Did you move this money from a 401(k) to a Roth 401(k)?" screen answer "No"

I only receive this question (pasted below) related to Roth IRA and when I check "No, I didn't" it brings me to the error message pasted in my reply above.

Did you move the money to a Roth IRA?

For rollovers to other types of retirement accounts (such as a traditional IRA), just answer No.

Yes, this money was rolled over to a Roth IRA

No, I didn’t

[ColeenD3]

You said, " I indeed did a direct rollover from one retirement plan to another.". You also said that it was not into a Roth. What retirement plan did you roll it into? Was it another Traditional IRA?

[prietofamily]

I rolled an old 401K balance (traditional IRA) to plan that's set up through a 403b (also through an old employer, who allows rollovers into their plan even though I don't work there anymore).

It's definitely not a Roth IRA. It's listed within the 403b plan as a "variable annuity" if that helps?
Thank you! 

[ColeenD3]

You said, "I rolled an old 401K balance (traditional IRA)".

If you rolled over an old 401k balance, that is not a Traditional IRA. Did you roll the 401k to an IRA and then roll the IRA balance over?

[prietofamily]

Yes, sorry. 
I had long ago rolled the 401K into a (traditional) IRA account within the same brokerage/company. 

Then in 2021 I rolled that IRA account balance into the annuity account held through my old 403b. 

EDITED TO ADD: I just checked to make sure I had this correct, and the account I rolled my 401K balance into years ago was called a "Rollover IRA" 

[prietofamily]

My 1099-R has the IRA/SEP/SIMPLE box checked, and then has Distribution Code G.

Taxable amount is shown as $0 on the 1099-R

[ColeenD3]

Ok, it seems as though everything is being correctly entered. Try to delete the 1099-R and re-enter the information. You may want to clear cookies and cache too.

Here's the general procedure for viewing the forms list and deleting unwanted forms, schedules, and worksheets in TurboTax Online:

1. Open or continue your return in TurboTax.
2. In the left menu, select Tax Tools and then Tools.
3. In the pop-up window Tool Center, choose Delete a form.
4. Select Delete next to the form/schedule/worksheet in the list and follow the instructions

[prietofamily]

thank you for your help - I will try deleting and redoing that part this morning

[prietofamily]

I deleted cookies and cleared cache, and I deleted the form from my TurboTax online account using the instructions you gave (thank you). Then I restarted my computer. 
I then logged back in and re-loaded the 1099-R, allowing the system to get the form directly from the brokerage company in hopes that might help (previously I had uploaded it into the system via PDF).
Unfortunately, after I answer no to the question "Did you move the money to a Roth IRA?" it brings me to the same message page as before, as pasted below. 

"Double check Box 7 and the IRA box on your 1099-R

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.

If you need to make changes, select Back. If this matches exactly what’s on your form, we recommend you contact your provider to correct it."

[AnnetteB6 · Accepted solution]

Even though you are getting a message on the screen that your distribution code is incorrect for the situation you described, take a look at your actual Form 1040 to see if the tax treatment is correct without changing your entries.

When a Traditional IRA is directly rolled over to another retirement plan that is also tax-deferred and not a Roth designated account, the Form 1040 should show the distribution amount on line 4a with ROLLOVER beside it.  Line 4b should be '0' indicating that there is no tax consequence.  

In TurboTax Online, use the following steps to check your Form 1040 while you are in your tax return:

• In the navigation area on the left side of your screen, click Tax Tools to expand your choices
• Click Tools, which will open the Tool Center
• Click View Tax Summary under “Other Helpful Links…”
• Click Preview My 1040 to see your actual tax form

In order for us to take a closer look at the error message you are seeing on screen, it would be helpful to have a diagnostic copy of your tax return.  The diagnostic file will not contain personal identifiable information, only numbers related to your tax forms.

To do so, follow the instructions below and post the token number along with which version of TurboTax Online you are using in a follow-up thread.

 Use these steps:

• Sign in to your account and be sure you are in your tax return.
• Select Tax Tools in the menu to the left.
• Select Tools.
• Select Share my file with agent.
• A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
• Post the token number here. 

@prietofamily

[prietofamily]

Thank you. I checked my 1040 per your instructions, and it indeed is correct despite the message the website is giving me. 
I have a second 1099-R coming from another bank. If I have the same issue with that one, I'll do the diagnostic copy then, in hopes of figuring out what's going on!

Thank you again to everyone for the help.