Super Roth 401(k) and Pre-tax on 1099-R

[kerplunk]

In 2022, I left my employer for a new employer. My 401(k) had a mixture of pre-tax, Roth, and Super Roth contributions. 

I rolled over my pre-tax contributions to my new 401(k) and rolled over the Roth and Super Roth contributions to a Roth IRA.

I received two 1099-R forms for my 401(k). One was for my Roth contributions:

Box 1 - $200,000.00 (example)

Box 2 - $0.00

Total distribution - Checked

Box 5 - $155,138.87 (example)

Box 7 - H

The other 1099-R included pre-tax and Super Roth contributions:

Box 1 - $30,000.00 (example)

Box 2 - $14,239.83 (example) -- Pre-tax contributions

Total distribution - Checked

Box 5 - $15,760.17 -- Super Roth contributions

Box 7 - G

Any advice on the correct way to input this into TurboTax? Do I just include it as one entry? Did my 401(k) provider send me 1099-R forms with correct information?

Thank you so much for your help!

[dmertz]

There is no such thing as a "Super Roth" in a 401(k).  The amount in box 5 of the code-G Form 1099-R just represent the amount of after-tax contributions in the traditional 401(k).

The Forms 1099-R provided by the 401(k) plan are correct.  To report the code-G Form 1099-R where the pre-tax funds (box 2a amount) were rolled over to a traditional IRA and the after-tax funds (the box 5 amount) were rolled over to a Roth IRA, you must split the Form 1099-R into two for entry into TurboTax, one for the pre-tax portion and the other for the after-tax portion.

[kerplunk]

Thank you, dmertz. My previous 401(k) provider called it Super Roth. It's more commonly called "Mega Backdoor Roth." (After-tax contributions that are automatically converted to Roth.)

How do I split it into 2? (What numbers what I use for boxes 1, 2a, 2b, 5, and 7?)

Normally, I would type all of the numbers into TurboTax exactly how it appears on the form (1099-R). I greatly appreciate your assistance!

Is this what I need to do? https://ttlc.intuit.com/community/retirement/discussion/re-1099-r-401k-after-tax-contributions-rollo...

[dmertz]

Let me back up a bit because some of this does not make sense.

The code-G Form 1099-R disagrees with your assertion that the pre-tax funds were rolled over to to your new 401(k) because it shows the pre-tax portion ($14,239.83) as being taxable.  This implies that the pre-tax portion was either rolled over to the designated Roth account in the same 401(k) plan (not the new 401(k) plan) or was rolled over to a Roth IRA.

If the rollover of after-tax contributions to the 401(k) was automatic, were these In-plan Roth Rollovers to the designated Roth account (which was subsequently rolled over to the Roth IRA and part of the gross amount shown on the code-H form 1099-R as well as being part of the gross amount on the code-G From 1099-R) or were the after-tax funds in the traditional 401(k) rolled over directly to the Roth IRA?

[kerplunk]

Thank you for pointing that out, because that is what I thought too. Generally speaking, if box 2a is anything above $0.00, then that means some taxable event has happened?

The following is exactly what happened:

(FYI: the numbers I am using are not real numbers, but they are close to reality.)

I rolled over all of my 401(k) money from Principal to Fidelity.

I received two checks from Principal:

$200,000.00 (Roth) and $14,239.83 (Pre-tax)

I immediately deposited the checks at Fidelity. The $200,000 was deposited to a Roth IRA. The $14,239.83 went to a Rollover IRA.

I received two 1099-R forms from Principal for my 401(k) in 2022.

For box 1, one of the 1099-R forms says $200,000.00, but the other says $30,000.00.

The difference is $15,760.17... I was told $15,760.17 is what I contributed to Super Roth (Mega Backdoor Roth).

In summary, I received $230,000 in checks, but Principal is saying the gross distribution was $245,760.17.

I called Principal. They opened an internal case and called me back 2 days later saying everything was correct on the forms.

To answer your question, the after-tax contributions were automatic. I assume the after-tax funds were part of that $200,000, but I am not 100% sure.

I will call Principal again tomorrow to try and make sense of this. I will confirm the questions you just asked, but if you have any other advice for me, I'd greatly appreciate it. 

[dmertz]

"In summary, I received $230,000 in checks, but Principal is saying the gross distribution was $245,760.17."

You said earlier that you received $214,239.83 in checks and that the Forms 1099-R total $230,000.

From the transactions you described, the code-G Form 1099-R is apparently to be the sum of two transactions, the nontaxable In-plan Roth Rollover to the designated Roth account in your 401(k) plan of the after-tax $15,760.17 and the nontaxable rollover of the $14,239.83 of pre-tax money to the traditional Rollover IRA.  The amount in box 2a of this form should therefore be zero.  However, the $14,239.83 in box 2a implies that this Form 1099-R is reporting that the $14,239.83 was rolled over to a Roth IRA, not to a traditional Rollover IRA.  Whether Principal's reporting is correct or not depends on the type of IRA, traditional or Roth, you told them was to be the destination of the $14,239.83.  If you told Principal that the rollover of the $14,239.83 was to be to a Roth IRA, then the mistake was yours by depositing it into a traditional Rollover IRA or in telling Principal that this was to be rolled over to a Roth IRA.

Since the "Super Roth" feature is automatic, I assume that there were no taxable investment gains on the after-tax contributions that would have been required to be part of the In-plan Roth Rollover.

[kerplunk]

Sorry for the confusion. The correct numbers are:

$214,239.83 = amount I received in checks
$230,000.00 = combined total of the two "box 1" amounts on the 1099-R forms. ("Gross distribution")

I talked to Principal for 3 hours today, and they assured me the forms are correct. I confirmed with them that the $14,239.83 went to a Rollover IRA (not Roth), and they agreed and said the forms are correct for that situation. They said, because it is code "G" that means that nothing is taxable, even though "box 2a" shows $14,239.83.

So, I'm not sure. I was really hoping I didn't have to contact a CPA, but now I am thinking I may have to because I don't know if the form is actually correct or not. 

[dmertz · Accepted solution]

"They said, because it is code "G" that means that nothing is taxable, even though "box 2a" shows $14,239.83."

That statement shows a lack of competence on the part of the representative at Principal who told you that.

Since they will not correct this obviously incorrect Form 1099-R, you'll need to submit a substitute Form 1099-R (Form 4852) with the correct taxable amount of $0.  In fact, you should probably submit two substitute Forms 1099-R since TurboTax requires you to enter the In-plan Roth Rollover of the after-tax portion separately from the pre-tax portion rolled over to the traditional IRA.  The one for the In-plan Roth Rollover will have in boxes 1 and 5 the amount from box 5 of the original and the one for the rollover of the pre-tax funds to the Rollover IRA will have in box 1 the amount from box 2a of the original.  Both will have zero in box 2a.

[kerplunk]

@dmertz: thank you for all of your responses. Your responses helped me prove to my old 401(k) provider that their 1099-R form was incorrect. They sent me a corrected form with $0.00 as the taxable amount. It took a total of 12 hours of phone calls with them to make this happen. (Unbelievable!) 

After having the correct form, TurboTax was easy. I filed my taxes today without issue.

Have a very good weekend, knowing you greatly helped someone. Take care and thanks again!