Question regarding entering 1099-R from 401(k)

[b_puneet]

Hi,

I made after tax contributions through my payroll which were automatically converted to Roth 401(k) by the plan. I received 1099-R because of this. I have entered this form in TT online but I am confused by the following question that I get after entering this form -

"Did you make after-tax contributions to a 401(k), 403(b), or 457(b) plan?"
("This isn’t common but this is money you put in the plan yourself, not from your company.")

If I select yes, the box is empty (I would have guessed that it should have been pre-populated with Box 5 amount from 1099-R. If I select No I am concerned that the conversion amount will be treated as taxable. I am not sure how I am supposed to answer this question (and there is no help section for this question). Please clarify what I am supposed to answer for this question. I did not make any contributions other than after tax contributions directly through payroll.

[b_puneet]

Can anybody help please? If the question is not clear I can rephrase it.

[JohnB5677 · Accepted solution]

As I understand your question.  You made excess contributions to a traditional IRA that were not deductible.  Your company, with your authorization, recharacterized that money into a ROTH 401-K, or ROTH IRA.

With that being the case you should answer the question:

Did you make after-tax contributions to a 401(k), 403(b), or 457(b) plan? = Yes

The reason the box on the next question is blank is that you could have recharacterized an amount that was different than that in Box 5 of your 1099-R.

• You could have chosen to take some cash back.
• You could have had a carryover from a previous year.

If this doesn't resolve the question, please give us some clarification.

[b_puneet]

Thanks for your response. This is not about any IRA at all. This is about 401(k). My plan allows contributing to 401(k) beyond the standard pre-tax $19,500. So I contributed say $1000 on an after-tax basis (in addition to $19,500 pre-tax) and immediately converted $1000 to Roth 401(k). This resulted in 1099-R (which I expected). I entered this 1099-R in TT and TT showed that $1000 is non-taxable because it was contributed on an after tax basis. So far so good. But after entering all this, TT asks me the question that I shared in my original post. I don't understand why TT is asking me this question when I have already told TT what the distribution was, how much contribution was made and TT has already determined that it is not taxable.

[JulieS]

Yes, you should answer the question Yes, and enter the amount that was your after tax contribution.

@JohnB5677 is correct even though he assumed it was an IRA, the underlying reasoning is the same. 

[b_puneet]

Thank you.