How to file a Form 1099-DIV for a Rollover IRA for tax deferral

[thuyanhtax]

In 2022, after I moved the stocks in my 401K to a Rollover IRA account, I received an additional check for the dividend.  I also deposited the dividend check into the same Rollover IRA account.  This dividend amount was reported in Form 5498 in #2 Rollover contribution from my broker.  I received a 1099-DIV which lists the dividend in box #1a (as Total ordinary dividends) and #1b, and also the Federal income tax withheld amount in box #4.  How do I (or can I) report the dividend as the Rollover IRA amount in the Turbo tax for the tax deferral purpose?  Thank you.

[DanaB27]

You should have received Form 1099-R and not 1099-Div for the dividends from the 401k account. Cash dividends on stock in your 401(k), paid to you, are distributions from the 401(k) reportable on Form 1099-R. Please contact the issuer to see if they can issue you the correct form.

Once you got the correct Form 1099-R you will enter it with these steps:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Continue "Tell us if you moved the money through a rollover or conversion" and select "I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)"
5. Continue answering the questions.

Please be aware, if the tax withheld wasn't replaced by other funds to have a 100% rollover then the taxes withheld would be considered a distribution and subject to the 10% early withdrawal penalty if you are under 59 1/2.

[thuyanhtax]

Because the dividend was issued after my stocks were moved into the Rollover IRA account, the issuer (that received the dividend and then issued the 1099-DIV) was not able to issue the 1099-R.  In my case, do I have to report the dividend as taxable income and move it into a Roth IRA account from the Rollover IRA account ?  

[DaveF1006]

You would report the 1099 DIV in federal>wages and income>interest and dividends>dividends on 1099 DIV. This is a taxable event to you. Unfortunately, there is no way to report a rollover from a 1099 DIV into a IRA account. This can only be performed from a 1099R reporting event.

Now you can report the dividend contribution to either a Roth or Traditional IRA. If the contribution is more than $6500 or $7500 (if over the age of 50), Turbo Tax will recommend  you withdraw the excess amount by the due date of your return, which is April 18.  This is so you will not be assessed a penalty for the excess contribution,  which is 6% per year while the excess contribution stays in the account. In the Turbo Tax program, there will be a section in it that you will indicate that you will withdraw the excess contribution before the due date of the return.

If you withdraw the excess contribution, your IRA trustee will issue a 1099R in the following year reporting the withdrawal of the excess contribution. This is not a taxable event to you. 

To report your IRA contribution,  Go to federal>deductions and credits>retirement and investments>traditional and roth ira contributions.

@thuyanhtax