I am completing the 1099-R section and it's asking me "Where is your distribution from?" It's a 401k to ROTH IRA rollover. What do I select?

[hakimjoe]

Here are the options:

Military pension or survivor's benefits
Disability benefits (under age 65 only)
Three-year rule pension or 401(k) benefits
General rule pension or 401(k) benefits
None of the above

When I select General rule my refund increases, but when I select blank/none of the above I owe money to NJ. I don't want to mess this up. Also when I select General rule it's asking me for the values below. Where do I find this information? This was a one time rollover that happened in 2020 from a portion of my 401k to a ROTH IRA. The entire amount should be taxable. 

Part D ' General Rule Method

1 Contributions made to the plan: 

2 Expected return on contract (total sum of distributions - past, present, future): 

[Irene2805]

It doesn't sound like you are in the correct section of the interview.  Please delete the 1099-R and reenter it.  You will be able to do this on the 1099-R summary screen.

Since you rolled over the 401k distribution to a Roth IRA, the distribution will be taxable.  Contributions to your 401k are before-tax while funds in a Roth IRA are after-tax.  

If Box 7 of your 1099-R contains code 1, 2, or 7, indicate the rollover by following these steps:

1. Click on Federal > Wages & Income.
2. Scroll down to the Retirement Plans and Social Security section and click on the Start/Revisit box next to IRA, 4701(k), Pension Plan Withdrawals (1099-R). 
3. If you've already entered one (or more) 1099-Rs, you will see a screen Review Your 1099-R Info.  Click on the Edit link next to the 1099-R you wish to review.   
4. If you haven't already entered a 1099-R, you will see the screen, Your 1099-R. Click Yes and then Continue. 
5. On the screen, Who gave you a 1099-R,  make sure you click the box for the correct form you received:  Financial institution/other provider (1099-R); Office of Personnel Management (CSA-1099-R); Office of Personnel Management (CSF1099-R); or U.S. Railroad Retirement Board (RRB 1099-R)
6. You can either import your 1099-R or click on the I'll type it in myself box.   
7. If you select to enter the information yourself, continue through the screens, answering the interview questions.
8. A few screens after the 1099-R input screen, you should see a screen, Tell us if [you] moved the money through a rollover or conversion
9. Mark the radio button next to I converted some or all of it to a Roth IRA.
10. On the next screen indicate how much of the distribution was converted.  

If your 1099-R has different information, please respond to this thread with the details.

[hakimjoe]

Hello, thanks for the reply. I've already tried doing this section a couple of times from scratch, but always end up in the same spot. I never get this option "Tell us if [you] moved the money through a rollover or conversion". Box 7 distribution code is G. 

[DanaB27]

Since you code G in box 7 there will be different questions:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Select "No" to "Did you move this money from a 401(k) to a Roth 401(k)?"
5. Continue through the questions until "Did you move the money to a Roth IRA?" and select "Yes" and continue through the questions.

Please see these instructions in regards to the NJ question:

New Jersey Special Handling of Pension Distributions

TurboTax New Jersey uses the following pension codes:

M - Military pension or survivor's benefit

D - Disability benefits received for total and permanent disability (under age 65 only - if age 65 or above, use the Three-year or General rule)

T - Three-year rule pension benefits

G - General rule pension benefits

You can deduct disability benefits received if you were totally and permanently disabled and you are under age 65.

You can use the three-year rule method or the general rule method to calculate the taxable and excludable amounts for pension benefits.

Three-year rule: You may use this method if you will recover all of your contributions to the plan within 36 months from the date you receive your first payment from the plan, and both you and your employer contributed to the plan. Benefits based on your contributions are not taxable in New Jersey, but benefits based on your employer's contributions are fully taxable.

General rule: You must use this method if you will not recover your contributions within 36 months from the date you receive your first payment from the plan, or your employer did not contribute to the plan. Use this method to calculate a percentage of your annual benefits that is not taxable in New Jersey. Once you calculate the non-taxable percentage it will be used for all distributions from this plan in the future.

401(k) benefits: You must choose either the three-year rule or the general rule method if you made contributions to your 401(k) plan before 1984. New Jersey did not allow a deduction for these contributions in 1983 and prior years.

Other pension benefits are fully taxable in New Jersey (selecting "none of above").

If, as an employee, you were not required to pay into or make contributions to your retirement plan while you were working, it is a "noncontributory" plan, and all the amounts you receive from that plan are fully taxable.

If you made contributions to your retirement plan, it is a "contributory" plan. For New Jersey income tax purposes, you will use either the Three-Year Rule Method or the General Rule Method to determine the taxable part of any distribution you receive from a contributory plan other than an IRA. When using the Three-year Rule Method, your pension is nontaxable until the payments you receive from the plan equal the amount you contributed. Once you have received an amount equal to your contributions, all payments from the pension plan are fully taxable.

When you use the General Rule Method, in the first year, and every year after, part of your pension or annuity payment is taxable, and part can be excluded from your gross income.

For more information on pensions and annuities, see the New Jersey Division of Taxation, Tax Topic Bulletin GIT-1.

[hakimjoe]

Thanks for the reply. If I just want the conversion to be taxed this year and this year only at the full amount should I select "None of the above"? I make 8% contributions to my 401k plan with an employer match, but am not required to make them. 

[DanaB27]

Yes, you will select "none of the above" in your situation.

[Letters_1099R]

I got the 1099-R this year because in 2021 I rolled over after tax money that was in my 401k into a ROTH IRA.  I already paid taxes on this money years ago and it was sitting in my 401k as I over contributed at some point.  Box 7 code on my form is also G.  Why is TurboTax asking me about the source of my Distribution if I do not need to pay taxes on this moneys?

[RobertB4444]

@Letters_1099R  Weirdly, there are a lot of non-taxable things that are required to be reported on your tax return.  One of them is rollovers.  They're asking for the source because they're checking to make sure you're not trying to pull a fast one.  

[LabRetriever]

What do you do if your Tax Yr 2021 1099-R is reporting a transfer (distribution) from an employer 401(k) "after tax" contributions (Fidelity) to a Roth IRA (not a Roth 401K) and box 7 Distribution code is "G".  The form is showing Taxable Income (Box 2a) which is fairly small compared to the gross distribution in box 1, and I was told this was the amount of gain the employer 401k account made with the after-tax contributions.   When I enter the data Turbotax asks "...did this distribution go into a Roth 401(k) fund..."  which I think is a NO, because a Roth IRA is not the same thing as a Roth 401(k) according to other reading I've done .

[LabRetriever]

Thanks for your answer!  Just what I was looking for!   signed:  Stuck in Alaska