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Level 15

What form for in-plan 401(k) Roth conversion "income"?

@qofmiwok -See my answer to @ari444 .    e-trade does not issue the 1099-R - the 401(k) plan administrator does.  A 1099-R reports a distribution and yiu took the distribution from the 401(k) plan.   The 401(k) plan administrator is required by law to issue the 1099-R no later then Jan 31 following the year of the distribution which would be Jan 31, 2019 for a 2018 distribution.   Call the 401(k) plan administrator.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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Returning Member

What form for in-plan 401(k) Roth conversion "income"?

Again, this was not an IRA account.  this roll over was from a 401k to Roth 401k.  No IRA accounts involved.

 

I made the request online on Dec 28th, 2018, and it was completed on the same day based on their own records and confirmation.  They claim I missed the deadline by one day (Dec 27), so they're reporting it for 2019!  This is wrong!  As far as IRS, if it was dated prior to Dec 31, it must be reported for that year.  

 

 

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Level 15

What form for in-plan 401(k) Roth conversion "income"?


@ari444 wrote:

Again, this was not an IRA account.  this roll over was from a 401k to Roth 401k.  No IRA accounts involved.

 

I made the request online on Dec 28th, 2018, and it was completed on the same day based on their own records and confirmation.  They claim I missed the deadline by one day (Dec 27), so they're reporting it for 2019!  This is wrong!  As far as IRS, if it was dated prior to Dec 31, it must be reported for that year.  

 

(And I meant to say 401(k) Roth, not Roth IRA).

 

 


That is very common and normal for the plan documentation to say that it is the posting date that is reported which can take 2-3 days.  Since Dec 28 was a Friday, and Monday was a holiday then the posting date would be Jan 2, 2019.   That is not unusual at all.   That is why I always tell  everyone to never wait to the last business day of the year or it will not get posted to the next year and the IRS will go by the year on the 1099-R form.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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Level 2

What form for in-plan 401(k) Roth conversion "income"?

Mine is a solo 401k with eTrade; they are my plan administrator and issue all the tax forms.  They just don't seem to know what they are doing.  First they issued a 2018 5498, which they acknowledged was wrong.  Then after months and months of saying it was in process, they finally issued this 2018 1099-R last week which is also wrong.  I know they were "required" to issue one by Jan 31, 2019, but it's not like I can make them do this right.  I have contacted them dozens of times and they just seem to pass the information along to someone else.  Maybe it's outsourced but I don't know who it's outsourced to.

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Level 15

What form for in-plan 401(k) Roth conversion "income"?


@qofmiwok wrote:

Mine is a solo 401k with eTrade; they are my plan administrator and issue all the tax forms.  They just don't seem to know what they are doing.  First they issued a 2018 5498, which they acknowledged was wrong.  Then after months and months of saying it was in process, they finally issued this 2018 1099-R last week which is also wrong.  I know they were "required" to issue one by Jan 31, 2019, but it's not like I can make them do this right.  I have contacted them dozens of times and they just seem to pass the information along to someone else.  Maybe it's outsourced but I don't know who it's outsourced to.


You can prepare a substitute 1099-R as dmertz said above.   Select the "I need to prepare a substitute 1099-R" box in the 1099-R type screen.  The interview will ask for an explanation as to why you are using a substitute,a then ask the steps that you took to get it corrected.  Just repeated what you said above.

 

(Personally I would find a different trustee that knows what they are doing to administrate my account.)

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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Level 15

What form for in-plan 401(k) Roth conversion "income"?

ari444, I agree with macuser_22.  For the distribution to have been a 2018 distribution you were required to comply with the processing requirements of the administrator which can include a reasonable delay in processing the distribution.  Since the administrator did not process the distribution until 2019, it is a 2019 distribution, reportable on your 2019 tax return.

 

qofmiwok, the behavior of e-trade suggests that they believe that the account is not a solo 401(k) but is instead a traditional IRA, perhaps a SIMPLE IRA or SEP-IRA.  If that's the case and they believed that you had done a trustee-to-trustee transfer of the account to another traditional IRA, it's not reportable and no Form 1099-R would have been issued.  This is supported by the fact that they at one point issued a Form 5498 pertaining to this account.  Presumably you completed and provided them with a signed 401(k) plan agreement, but perhaps whoever set up the account in the system created it as an IRA and not a 401(k) account.  If it was in their system as an IRA, though, there is no way that they could have processed an in-plan rollover, only a Roth conversion from a traditional IRA to a Roth IRA.  Are you sure that the account that received the rollover is a Roth account in the 401(k)?  Regardless, there are no circumstances where a Form 1099-R is ever permitted to have code G in box 7, the IRA/SEP/SIMPLE box marked and anything other than a zero in box 2a and a zero of blank box 5.  A Form 1099-R with code G in box 7 and the IRA/SEP/SIMPLE box marked indicates a nontaxable rollover from a traditional IRA to a traditional account in a 401(k) or similar qualified retirement plan.

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Level 2

What form for in-plan 401(k) Roth conversion "income"?

Thanks, that is an interesting idea that the account may be coded incorrectly.  I will ask them to check that.  They all think it's a 401k when they look at it, but incorrect coding could explain why tax forms keep spitting out wrong.  It just doesn't seem feasible that with all the 401k's they must administer, someone there wouldn't know how to do this. 

 

I have no IRA's there, just a solo 401k with a traditional and a Roth option.  So there's no way they could have done a rollover or rollover/conversion to an eTrade IRA rather than an in-plan conversion.  

 

However the conversion was done in 2018 and in 2019 I did a rollover of the converted amount to an IRA at another custodian.  Maybe somehow they have co-mingled the two somehow through their coding.  I will have them look into this.  Thanks!

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Returning Member

What form for in-plan 401(k) Roth conversion "income"?

I understand that it "could" take 2-4 days to process, but mine didn't.  It said so on my confirmation page before I placed the order, and it said so after it completed on Dec. 28.  So the distribution did complete on the 28th, not Jan. 2nd.  In fact, on my confirmation letter, it says: "To determine if a payment from your Roth account(s) is qualified, your Roth Begin Date is December 28, 2018.".

 

They're going by the own made-up cut-off date, instead of the actual conversion date.

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Level 15

What form for in-plan 401(k) Roth conversion "income"?

If that confirmation letter is accurate, it seems pretty clear that this was a 2018 distribution required to be reported on a 2018 Form 1099-R.  It's obvious that the funds can't be contributed to the Roth account before they are distributed from the traditional account.  However, the confirmation letter from the plan administrator may or may not be sufficient to satisfy the IRS that the distribution year or the Roth beginning year is 2018 if the distribution is reported on a 2019 Form 1099-R.

 

(The actual date for the beginning of the 5-year period for Roth account qualification purposes is January 1 of the year you first contributed to the Roth account, so stating it as December 28 is a bit misleading.  Perhaps this is just another indication of the competence of the plan administrator.)