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Solved

Roth 401k reversal

Forum|Forum|5 years ago
January 27, 2021
1 reply
19 views

For reasons that are irrelevant I had to reverse all 401k contributions halfway last year (2020). All contributions were Roth. I received a 1099-R form that treats the final reversed amount as a distribution with code (box 7) E, which implies "Distributions under Employee Plans Compliance Resolution System (EPCRS)". Also, 10% of the distribution was withheld for federal taxes (box 4). I don't believe any of this should be taxable. So how should I make sure of this when entering this in Turbotax?

Best answer by dmertz

The amount of your Roth contributions should be in 5 of this Form 1099-R and the taxable amount in box 2a should be the amount in box 1 minus the amount in box 5. If the distribution was no more than the amount of your Roth contributions, the amounts in boxes 1 and 5 should be the same and the amount in box 2a should be zero.

TurboTax will include in income only the amount in box 2a even if no amount is present in box 5. If the amount in box 2a of the Form 1099-R provided by the payer is incorrect, obtain a corrected Form 1099-R from the payer.

dmertzAnswer

Level 15

The amount of your Roth contributions should be in 5 of this Form 1099-R and the taxable amount in box 2a should be the amount in box 1 minus the amount in box 5. If the distribution was no more than the amount of your Roth contributions, the amounts in boxes 1 and 5 should be the same and the amount in box 2a should be zero.

TurboTax will include in income only the amount in box 2a even if no amount is present in box 5. If the amount in box 2a of the Form 1099-R provided by the payer is incorrect, obtain a corrected Form 1099-R from the payer.