Mutual fund accidentally deposited 401k rollover into taxable acct

[dmertz]

Please elaborate.  Was the distribution from the 401(k) reported with code G on the Form 1099-R?  What did you do with the money after it was deposited in the non-retirement account?

[clorazepate1973]

Yes, the distribution is on code G. I am calling the mutual fund Monday & see if they can do anything. The Fund deposited in the wrong account, the company's mistake.  I have filed my taxes and do not know what to do.

[clorazepate1973]

Thank you !

[dmertz · Accepted solution]

Because the distribution was deposited into a non-retirement account in your name, this distribution fails to qualify as a direct rollover despite what is reported on the Form 1099-R.  Because it is not a direct rollover, the distribution became subject to the 60-day indirect rollover rule.

Under the circumstances, you can self-certify that you would qualify for a waiver of the 60-day rollover rule under reason 3.02(a) or 3.02(c) of IRS Revenue Procedure 2016-47.  By self-certifying, the custodian of the proper retirement account that was intended to be the destination of the direct rollover is permitted to accept the rollover to that account despite missing the 60-day deadline.

IRS Rev. Proc 2016-47:  https://www.irs.gov/pub/irs-drop/rp-16-47.pdf

Once (indirectly) rolled over to the correct account, you can report the code G Form 1099-R as received.  When entering a code G Form 1099-R, the tax treatment and its appearance on your tax return is the same as it would be for a Form 1099-R reporting a distribution that was indirectly rollover.