topic Re: 1099R code possibly erroneous? in Retirement tax questions

1099R code possibly erroneous?

sp8181 — Tue, 08 Apr 2025 04:13:21 GMT

Hi everyone, this is the first time I am using this forum and I want to thank the community for this support. In 2024 I did a roth conversion from my IRA to a Roth IRA in TIAA. In the 1099-R, box 1 has the amount converted, box 2a has the same amount as taxable amount. Box 7 code is G, and the IRA/SEP/Simple has an X. When I entered this in Turbotax and answered questions it said for Roth conversions the code should be 1, 2 or 7 instead. When I contacted TIAA they said they wont issue a corrected 1099R and suggested I contact a CPA rather than try to file it on Turbotax. Given the short turnaround time for filing day, I am hoping there is a solution.

thank you.

Re: 1099R code possibly erroneous?

fanfare — Tue, 08 Apr 2025 04:45:24 GMT

Just use box 7 code = "7"

code 7 is for person over age 59 1/2. It really doesn't matter which of those three codes you pick.

@sp8181

Re: 1099R code possibly erroneous?

dmertz — Tue, 08 Apr 2025 12:37:37 GMT

Yes the Form 1099-R is erroneous. Code G with the IRA/SEP/SIMPLE box marked reports a rollover from a traditional IRA to a traditional account in an employer plan like a 401(k). A conversion to a Roth IRA is to be reported code 2 or code 7 depending on your age and will have the IRA/SEP/SIMPLE box marked. (Although a Roth conversion at a particular financial institution is a type of rollover, the term "direct rollover" signified by code G only applies to rollovers to or from an employer plan like a 401(k).)

Simply changing the code will likely result in a red flag being raised with the IRS. You should request a filing extension and request a corrected Form 1099-R.

Re: 1099R code possibly erroneous?

sp8181 — Fri, 11 Apr 2025 15:00:42 GMT

Thank you for your suggestion. !!

Re: 1099R code possibly erroneous?

sp8181 — Fri, 11 Apr 2025 15:08:12 GMT

@dmertz . thank you for the detailed response. I have spent hours emailing/calling TIAA and finally they informed me that they processed it as rollover and not a conversion based on the forms used. (Of note, the form was provided by my TIAA advisory team). Hence they said there is nothing they can do and will not issue me a new 1099-R. So suggestions at this point would be greatly appreciated.

Regards.

Re: 1099R code possibly erroneous?

dmertz — Fri, 11 Apr 2025 16:14:59 GMT

Their explanation is nonsensical. A form 1099-R with code G in box 7, the IRA/SEP/SIMPLE box marked and a nonzero amount in box 2a reports what is essentially an illegal transaction, a rollover from a traditional IRA to a designated Roth account in an employer plan, not to a Roth IRA.

The proper approach would be to submit a substitute Form 1099-R (Form 4852) showing code 2 (under age 59½) or code 7 (age 59½ or over) in box 7 and provide explanation. However, filing a substitute Form 1099-R requires printing and mailing your tax return. Alternatively, you could simply change the code to code 2 or code 7 and enter without claiming it to be a substitute Form 1099-R as fanfare suggests, then wait and see if the IRS questions it, at which time you could provide explanation.

Re: 1099R code possibly erroneous?

sp8181 — Sun, 13 Apr 2025 15:32:28 GMT

Thank you @dmertz . Appreciate your input. I will do what fanfare suggests and go with code 2 (which incidentally was on the form from Vanguard for my wife's conversion which they processed correctly).

Regards.