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New Member

Why are 401k and 403k rollovers counted as income? What do I need to do in TurboTax to make my rollovers not counted as income?

Why are 401k and 403k rollovers counted as income?  What do I need to do in TurboTax to make my rollovers not counted as income?

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Level 15

Why are 401k and 403k rollovers counted as income? What do I need to do in TurboTax to make my rollovers not counted as income?

It will show as income on the summary screen which shows gross income, not taxable income.

The income will be reported on line 4a and 4b on the 1040 form with the word “ROLLOVER” next to it if it was a rollover.

The taxable amount will go on the 1040 line 4b.  In the case of a rollover, nothing goes on 4b.

**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

Why are 401k and 403k rollovers counted as income? What do I need to do in TurboTax to make my rollovers not counted as income?

It will show as income on the summary screen which shows gross income, not taxable income.

The income will be reported on line 4a and 4b on the 1040 form with the word “ROLLOVER” next to it if it was a rollover.

The taxable amount will go on the 1040 line 4b.  In the case of a rollover, nothing goes on 4b.

**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

Why are 401k and 403k rollovers counted as income? What do I need to do in TurboTax to make my rollovers not counted as income?

I'm having the same problem. Even though it's being tagged ROLLOVER, 4b still shows the full amount and is double counted as taxable income

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Expert Alumni

Why are 401k and 403k rollovers counted as income? What do I need to do in TurboTax to make my rollovers not counted as income?

If it is tagged as rollover on the left side of 4b, it absolutely should not have an amount in 4b.  in fact, Turbo Tax should have indicated to you in the program that you won't need to pay tax on the rollover when you entered the 1099R and deemed it a rollover either:

  • With a code G in Box 7 or
  • You indicated that it was a rollover as you entered information when it asked what you did with the money

You may wish to contact Turbo Tax phone support so they can view your screen and return to see why a taxable amount is showing in 4b even though it is tagged a rollover.  There may be another issue that we might be overlooking.

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Returning Member

Why are 401k and 403k rollovers counted as income? What do I need to do in TurboTax to make my rollovers not counted as income?

Yes, I contacted support and it is a bug.  If you leave the taxable amount blank (as it appears on the actual form) it does not register correct and fills in the full amount.  You must enter 0, for it to not appear as taxable. However, by doing so, you lose the ROLLOVER tag (but I don't think this matters much)

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Expert Alumni

Why are 401k and 403k rollovers counted as income? What do I need to do in TurboTax to make my rollovers not counted as income?

Whether or not your rollover is taxable may have more to do with where you rolled these funds to. 

Both the 401k and the 403(b) are pre-tax when you make the contribution.

If you roll the funds into an after tax account such as a Roth, you will have a taxable distribution.

You still will not pay a penalty on the distribution.

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