1099R with no Taxable Income but added to Adjusted Gross Income

[ncebalo]

So I finally decided to get brave and do my taxes this year by myself using Turbo Tax.  I received a 1099R from Fidelity due to a rollover.  It states that there is no taxable income, however, when using Turbo Tax Software it added the $30,000 to my Adjusted Gross Income.  Did i do something wrong?  If so what did I do wrong, if not, why is it adding it to my adjusted gross income when i never received the money. 

Thanks in advance everyone!

[CatinaT1]

Review the answers you have in this area of the return. Ensure you have entered the Distribution Code of G, which marks it as a rollover.  The amount is rolled over is reportable and will appear on your return, but as a not taxable amount.  

To get back to your 1099-R, follow these steps:

1. Sign into your TurboTax account
2. Click on Search in the upper right corner next to the magnifying glass
3. Type 1099R
4. Click the Jump To link in the search results
5. Click Edit 

[2006Miata]

Check block 7 on the 1099R, it should be a G, which is not taxed as it is a rollover.  Now check your input to Turbo Tax to verify it is a G and not another number or character.

[ncebalo]

Thank you both, I did verify It is G.  Its still adding the extra 30 grand to my adjusted gross income.  I went through all the steps again and made sure everything was correct. 

[BillM223]

A distribution code of "G" is used only in certain case:

"Use Code G for a direct rollover from a qualified plan, a section 403(b) plan, or a governmental section 457(b) plan to an eligible retirement plan (another qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA)." (see 1099-R instructions).  NOTE: 401(k) plans are qualified plans.

Was your transaction one of these listed above? If it was and you do not see a code G for the distribution code on your 1099-R, then you will want to contact the plan administrator and ask for a corrected 1099-R. Otherwise, the IRS will wonder why you did not report that income (the IRS gets a copy of the 1099-R as well).

If your transaction/distribution was of another type, come back and tell us what it was. 

[ncebalo]

My 1099R does have G, I went into Turbo tax as well and it shows i input the correct code of G.  I rolled over 30,000 from one IRA to another. I never saw the money and it went directly to the other account via transfer. 

[MinhT1]

In the TurboTax income summary, you will see the amount of that 1099-R listed as gross income, but it is not TAXABLE income and should not be included in your AGI.

The best way to check it before you file is by previewing your 1040. You will see the rollover included in line 4a - IRA distributions, but NOT in line 4b - Taxable amount.

You can preview your 1040 by following these steps:

• In TurboTax, open your return
• In the left-hand column, locate Tax Tools, click on the drop-down arrow then click on Tools
• On the Tools Center page, click on View Tax Summary
• In the left-hand column, click on Preview my 1040
• Your form 1040 will display.

[ncebalo]

Than you everyone, I went to the 1099R section and deleted it and re-entered it and it looked like it fixed it, I am not sure what happened, but it looks like its ok now.  Thank you everyone with your patience and help!  

[MB001]

I have this same issue for the past 3 years... still trying to resolve and amend.  The 1099R code G rollover gets added to adjusted gross even though no taxes taken. This then is income... will it not be income again when I finally do withdraw the money?  The addition to gross income changes my tax status and I pay a higher rate on the added income and lose some credits as this additional income puts me over set limits.

What is the real solution to Turbo Tax?

[DoninGA]

@MB001 If your Form 1099-R has a code of G in box 7 then the total distribution from box 1 will be entered on Form 1040 on either Line 4a or 5a, depending on the type of plan, with the word ROLLOVER entered on the line.  On either Line 4b or 5b will have a 0 (zero) entered.  Meaning that the distribution was not taxable and will not be entered as taxable income on your tax return.

If you have anything other than a 0 entered on Line 4b or 5b then delete the Form 1099-R and enter it manually.

[Mike9241]

You have done something wrong (or maybe it's TurboTax) or there is something you are not telling us. If Box 7 only contains a G (direct rollover from one qualified retirement plan to another) then the amount should not be taxable. it's like moving money from your left pocket to your right pocket. We can't see your return so it's not possible to diagnose your issue.  As best as i can provide

the box 1 amount should appear box 4a (IRA) or 5a (other pension) but zero in the related 4b or 5b box and the word rollover should appear.

you may need to seek professional help and if needed file amended returns for the open years. the worst case scenario is you us it's taken again when withdrawn. 

[dmertz]

A code-G Form 1099-R reporting a nontaxable rollover will always have a zero in box 2a.  If box 2a is nonzero, it implies a taxable direct rollover to a Roth account.