1099-R Distribution code 1 but distribution was put into qualified plan

[cmdemuth]

I have received a 1099-R with distribution code 1 but I put the distribution into a qualified plan and need to know how to code the questions in the PA tax return to show the it was rolled over

[JotikaT2]

The entries in your federal return will pull into your state income tax return as well.

Do you have another code besides 1 listed in Box 7 of your 1099-R form?

Typically, a rollover would be reflected as an additional code of Code G or H. 

If neither of these codes are reflected on your 1099-R form, you may need to contact the issuer of your 1099-R to ensure the amounts are being reported correctly to the taxing agencies.  Otherwise, there could be a delay in processing your tax returns as the amounts reported will not match your income tax returns. 

[cmdemuth]

No it is only a 1.   I had signed the check over to have it put into my rollover Traditional IRA and I put in the additional monies that were taken out for taxes to match entire distribution.  On the Federal return it was clear cut and allowed me to identify but when PA came up there is the box that asks about "tell us about your retirement income", should I be checking the "Entire amount of this distribution is not taxable in PA"?  then the  " What kind of retirement income do you have in Pennsylvania" drop down box, when asked to choose the description I have "rollover" right now but it seems that "I am not eligible yet; plan's eligible in PA" also fits.  By the way I am 54

[AmyC]

Your age makes you not eligible. PA law is very different from the federal. You will need to be sure your basis is correct so you are paying tax only

I don't know where the money came from but you rolled it into a Traditional IRA. If the money was already taxed, like a traditional IRA in PA is, then you would pay tax on the earnings, since you are under age 59 1/2. 

• Amounts rolled over into IRAs from non-IRA individual retirement plans are generally considered income in the distribution year to the extent the distributions exceed contributions to the plan.
•  Amounts rolled over into an individual's IRA from a federally qualified retirement plan (other than an individual retirement plan) are generally considered income for the distribution year to the extent the distributions exceed contributions to the plan.

Retirement - Traditional IRAs and Roth IRAs - PA Department ...

PA law says:  Box 7, Form 1099-R Code 1 or 2, early distribution. Taxable unless the pension plan was an eligible plan for PA tax purposes and the taxpayer retired after meeting the age conditions of the plan or years of service conditions of the plan.

IRAs. Contributions are not deductible. Income earned inside the account is tax deferred. Distributions, including Roth IRA distributions, are taxable to the extent the distribution exceeds previously taxed contributions.

Exception:

Distributions are not taxable if the payments are:

• Received, including lump-sum distributions, on or after reaching the age of 59½, or

• Paid to the estate, or designated beneficiary, of the participant because of the participant’s death.

Roth IRA rollover. A distribution from a traditional IRA is not taxable if the entire withdrawal is rolled over (within 60 days) or directly transferred into a Roth IRA

Related: Find Answers - Pennsylvania Department of Revenue