I have a 401k loan (i have both traditional and roth 401k). My company was bought a few years ago and they finally moved our benefits this year. I received a 1099 from my old 401k provider (marked M1 and MB for my traditional and roth accts respectively) for the remaining balance when we converted back in February. Since the conversion to our new provider I have continued payments on the loan.
my questions are:
on turbo tax i dont see an option where it asks if i am still paying my loan payments for my "new 401k". Do I select the rollover to new plan option after entering the 1099 info?
will I receive a form from my new 401k provider much like a 5498 when you do IRA rollovers to show this is not a taxable event? Ive called both my old and new providers and the old provider said they provide nothing and my 1099 is marked correctly. My new provider is researching on their end as to if theres some kind of form they provide to show that the loan is still active and being repaid.
You would indicate that you rolled over the funds if you stayed current on the loan payments.
I'm not sure about the form 5498 as that is prepared by the broker.
The offset distribution satisfied the loan, so the money that you are putting into the plan as "repayments" are actually rollover contributions to the plan, not loan repayments. You only have until the extended due date of your tax return to make rollover contributions to reduce the taxable amount of the offset distribution. You might want to file a request for a filing extension to ensure that the deadline for making rollover contributions is extended beyond the regular filing deadline of April 18, 2022 to October 17, 2022. (Filing your tax return by April 18, 2022 will also extend the deadline for making these rollover contributions, but you'll have to file an amended tax return if you make additional rollover contributions with respect to the offset distribution between the time you file and October 17, 2022.) After October 17, 2022 you will not be able to roll over any other amounts of the offset distribution. These remaining amounts will be subject to tax and an early-distribution penalty. Ideally you would be first rolling over amounts of the distribution from the traditional 401(k) account since portions of the distributions from the Roth 401(k) will be free of tax and penalty.
In TurboTax you'll need to indicate the amount of this distribution that was rolled over.
401(k) plans have is no equivalent to Form 5498. The new 401(k) plan reports nothing to the IRS regarding receipt of the rollover. It's probably more common that people roll an offset distribution over to an IRA rather than an employer plan, in which case the Form 5498 provided by the IRA would code the rollovers as rollovers of an offset distribution.
If my loan has been “satisfied” then why is my loan still active under my new 401k provider?
You'll have to ask them. Did you take out a new loan with them?
Perhaps they initiated a new loan for the amount of the offset distribution, used that to complete the rollover of the entire offset distribution (which would need to be reported as rollovers when entering the Forms 1099-R that you received) and you are now making payments on the new loan.
I had 2 loans at my company -> company is bot out-> “new employer” moves our benefits over this year to their stuff -> balances and loans are moved to new 401k provider -> loans are still active and being paid back as per the terms of my old 401k. I’ve called my “new” 501k provider and they are researching on their end but our company is 35k employees and I can’t be the only one of the 15k people that stayed after the buyout that had a loan.
If this was a case of the old employer being bought out by the new employer and the 401(k) plans merged, the transfer of the funds and the loan to the new plan could have been done as a nonreportable transfer and there could have been no reporting of an offset distribution. However, it seems that the moved the loan by making an offset distribution, creating a new loan and using the new loan proceeds to roll over the offset distribution. This sound a little bit fishy since the new loan would have to happen before the loan proceeds were used to fund the rollover of the offset distribution and the new loan would be subject to the current balance in the plan, not the current balance plus the amount of the offset distribution. It seems to me that there really should have been no reporting of an offset distribution if the loan was simply transferred to the new plan.