topic Re: Code H in Retirement tax questions

Code H

Brian3222 — Mon, 10 Feb 2025 20:59:52 GMT

I did a direct roll over of Roth IRA funds from my 403B to E trade

Got 1099R from 403B company .

Box 7 has code H in it: "Direct roll over into Roth." ----------as this is what I did

Turbo tax then says I owe $7100 in taxes for this.

Box 2 is blank ---NOTHING in it, box 2b is checked " taxable amount not determined" Box 4: '0" for fed tax withheld.

403B company says their 1099 is correct.

Whats the deal? Is this a malfunction in Turbo tax?

Re: Code H

dmertz — Mon, 10 Feb 2025 21:35:38 GMT

First, the Roth account in your 403(b) was not a Roth IRA.

Second, a distribution reported with code H is never taxable. A From 1099-R with code H in box 7 is always to have a zero in box 2a and box 2b Taxable amount not determined unmarked, so the 403(b) plan prepared the Form 1099-R incorrectly. To accommodate such erroneous Forms 1099-R, it would probably be better if TurboTax always automatically treated code H as meaning nontaxable, but that's unlikely to ever happen.

It's doubtful that the 403(b) plan will admit their error, so just enter a zero in box 2a of TurboTax's 1099-R form. The fact that you have done so will not be apparent to the IRS.

Re: Code H

Brian3222 — Mon, 10 Feb 2025 22:46:11 GMT

Thanks for you reply. The 403b was a Roth though, it said so on my account dash board. So it was a Roth to Roth transfer.

Re: Code H

dmertz — Tue, 11 Feb 2025 00:30:05 GMT

Right. You said, "I did a direct roll over of Roth IRA funds from my 403B..." The wording is a bit ambiguous, so I just wanted to make it clear that they were not Roth IRA funds until they were deposited into the Roth IRA.