401K withdrawal (1099-R)

[Shondra1781]

After I entered my 1099-R in, why did my federal/state refund amount decrease? Why do I now owe state taxes? I have always received a state refund, but this year it's different.

[AnnetteB6 · Accepted solution]

It depends on the details of your 401k withdrawal.  

If it was an early distribution, then the distribution amount will increase your taxable income (on your Federal return and state as well) and you may also owe a 10% early distribution penalty on your Federal return.  Plus, if you did not have taxes withheld, then your refund will certainly be reduced to cover the additional taxes on the distribution.  

If your withdrawal was rolled over into an IRA, be sure to double-check the information that you entered from your Form 1099-R and also pay close attention to all the follow-up questions that come up after entering the Form 1099-R.  Those questions help to determine how much of the distribution is taxable, if any.  

[bill_breen]

Turbo Tax did not ask where my distribution from my prior employer went? Turbo Tax only shows the distribution to me.

When does Turbo Tax question where is went?( in my case it was deposited into my Edward Jones acct)

[dmertz]

bill_breen, what is the code in box 7 of the Form 1099-R?

Is the IRA/SEP/SIMPLE box marked?

Several codes (e.g., code H)  automatically indicate the type of account to which the distribution is rolled, so there is no need for TurboTax to ask.

[ELuap55]

I received a 1099-R for a rollover of a 401K to a traditional IRA. None of the amount in box 1 is taxable, and that's 'ok' BUT, it somehow is now income as income so affects my gross and therefore puts me in a higher tax bracket. (This makes no sense as I already had this same amount in a 401K.) 

[JohnB5677]

Please go back to the information from the 1099-R.  Select [EDIT] to move on.

1. Verify the owner of this 1099-R
2. Double check the Information on the 1099-R.  Especially Box 7.
3. Did you inherit the IRA? - NO
4. WHAT DID YOU DO WITH THE MONEY FROM THIS PAYER
5. The answer is" You moved the money to another retirement account."

By making this selection you will properly Rollover from your 401-K to an IRA without incurring tax.

[maritrenge]

I took money from my 401k and had them take state tax out, i don't see where i received credit for paying that tax on my state return

[RobertG]

To see the amount of state taxes paid:

1. Go to Deductions & Credits
2. Edit Income Taxes Paid
3. On the About income taxes paid page select Where does the other income taxes amount come from?

This will show the total amount of your state withholding.

@maritrenge

[clayer]

I have this issue, too. There's nothing in my version of Intuit asking me "WHAT DID YOU DO WITH THE MONEY FROM THIS PAYER". Never got the "did you inherit this money" either.

Please help. How do I get Turbo Tax to identify that this was a complete rollover to an IRA, and should not be taxed.

Thanks...

[macuser_22]

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@clayer wrote:

I have this issue, too. There's nothing in my version of Intuit asking me "WHAT DID YOU DO WITH THE MONEY FROM THIS PAYER". Never got the "did you inherit this money" either.

Please help. How do I get Turbo Tax to identify that this was a complete rollover to an IRA, and should not be taxed.

Thanks...

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What code is in box 7 on your 1099-R?

Is the IRA/SEP/SIMPLE box checked?

[DaveF1006]

First check to see if the box is for the IRA is checked.There is a check mark between boxes 7 and 8 in Turbo Tax 1099R that you will check. First edit the 1099R you have entered into the return and make sure that check box is checked. Then as you navigate through the entries, a question will appear asking you if you inherited the IRA and the very next question after that one asks what you did with the money. Here you will indicate if you rolled it over to another account.

If this doesn't work,  you may wish to contact a specialist that can work through that section of the return with you. The specialists can look at your return on their screen to find out exactly what is causing this issue and suggest how you can correct it. Without seeing your screen, i can't really tell what problems you are experiencing.

[PCriffic]

My 1099-R is reporting G - a rollover, but the amount of the distribution is still showing as taxable income.

What distribution code should be in box 7 to show that I rolled the distribution into another retirement plan.

[ColeenD3]

Make sure that is actually showing on Line 4b or 4d of your 1040. It may look like it is taxable when you look at all the income under "Your income and expenses", but that is the only place it counts. Code G is for rollovers.

IRA, 401(k), Pension Plan Withdrawals (1099-R)                                  $10,000.00

[macuser_22]

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@PCriffic wrote:

My 1099-R is reporting G - a rollover, but the amount of the distribution is still showing as taxable income.

What distribution code should be in box 7 to show that I rolled the distribution into another retirement plan.

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A code G is a rollover, unless you indicated that it was rolled to a 401(k) Roth or  a Roth IRA then the 1040 line 4d (the taxable amount) should be zero with the word ROLLOVER next to it.

[Nina49]

I transferred money from a 401k to a traditional IRA account. While the amount isn't taxable it was still added to my gross earnings and pushed them right to the edge where I don't qualify for certain tax breaks -- Such as the homestead property tax credit in my state and the ability to invest more money into an IRA in order to get a tax credit. All I understood at the time, was that the rollover wasn't taxable. I have paid Turbo Tax, but have not filed yet. I'm wondering if I entered some information about this incorrectly.