1099-R for a 401k rollover that has both pre-tax a...
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Level 2

1099-R for a 401k rollover that has both pre-tax and after tax contributions

Several people have had the same issue and I'm not sure that the solution that I have found reading the answers is the best/right answer.

 

We rolled a 401k, which had both after tax and pre-tax funds in it, into an IRA and a Roth IRA. We received one 1099 that covered this transaction. When the figures are entered into TurboTax, for some reason it is calculating that we need to pay tax on the part of the distribution that rolled into the IRA, even though line 2a (taxable amount) is $0.00 and box 7 has G in it stating that it is a direct rollover and rollover contribution.

 

The solution that I found on this forum suggested that the only way to solve this problem is to divide the distribution into two 1099-Rs. The institution that sent the 1099-R says that it is correct and we should not have to divide it up.  Is there a different way to solve this problem? Is it OK to divide the 1099-R into two?

 

I thought maybe the code(s) on line 7 should be G & H, since part went to an IRA and part went to a Roth IRA, but changing that on the form, although it took away wrongly applied taxes, caused a flag by TurboTax.

4 Replies
Level 15

1099-R for a 401k rollover that has both pre-tax and after tax contributions

Code H does not apply here.  I assume that the after-tax contributions rolled to the Roth are also in box 5.

 

The 1099-R is correct but TurboTax does not directly support a single 1099-R going to two different destinations.

What you must do is split the 1099-R into two 1099-Rs.

For the amount rolled to the Traditional IRA.

1) In box 1 use the original 1099-R box 1 minus the box 5 amount.

2) Box 2a = 0.

3) Box 5 = blank.

4) Box 7 = G.

5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.

For the amount rolled to the Roth IRA.

1) In box 1 enter the original box 5 amount.

2) Box 2a - 0.

3) Box 5 = original box 5 amount.

4) Box 7 = G.

5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.

That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.

Nothing about splitting into two 1099-R's go on a tax return - the IRS only gets the dollar amounts on the 1040 form.

**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.**
Level 2

1099-R for a 401k rollover that has both pre-tax and after tax contributions

Thanks. Annoyed that there is not an easier solution...seems like it would not be a difficult piece of programming to take care of this more efficiently, but I'll go with your suggestion. Cheers.

Level 2

1099-R for a 401k rollover that has both pre-tax and after tax contributions

Another question...bump in the road. My 1099-R has no entry in line 14 (State distribution). Do I put a 0 there?

I can't go on until that is answered.

Level 15

1099-R for a 401k rollover that has both pre-tax and after tax contributions

A code G 1099-R should have no state tax withheld so all boxes 12-14 must be blank (some payers put their state ID in box 13 even when there is no box 12 tax and that is not allowed so make it blank).   If there IS a dollar amount in box 12 then the 1099-R is incorrect.

**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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