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

[CraftyGram47]

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.

[macuser_22]

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.

[CraftyGram47]

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.

[CraftyGram47]

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.

[macuser_22]

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.

[SobBeger]

Update.  As of 2/2023 I asume Intuit has now informed users filing 1099-R with combined pre and post tax 401-K rollover funds, directed to traditional and Roth IRAs, that this bug has been corrected within Turbo tax.  Therefore no need to double enter the single 1099-R recieved from your institution.  Please comment or correct. Thanks

[RunningManAloha]

I'm still seeing this same issue described in this thread.  I have the latest updated version of TurboTax as of March 4th.   It does not seem to be fixed yet.

[JohnB5677]

This is a simple work around to post the 1099-R with both taxable and Nontaxable funds.

On sidebar 

1. Select Federal 
2. Wages & Income 
3. Select Wages and Salaries, or Revisit 
4. Scroll to Retirement Plans and Social Security
5. Select the type of income.
   1. IRA, 401(k), Pension Plan Withdrawals (1099-R)
   2. Social Security (SSA-1099, RRB-1099)
   3. Canadian Registered Pension Income
6. At this point you can edit an existing document of [Add another 1099-R]
7. If a new 1099-R continue to Let's import your tax info
8.  You can import by selecting your provider. 
   1. Follow the instructions.
9.  or [Change how I enter my form]
10. [Type it Myself]
11. Post your information.
12. If you have a taxable amount that is different from the total amount, enter it in Box 2a.
13. Continue the interview to
    1. Tell us if Cynthia moved the money through a rollover or conversion.
    2. Select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days).
14. Did (You) rollover all of this $(Full Amount) (Box 1) to another retirement account?
    1. Respond No, (You) rolled over less than $(Amount).
    2. Enter the amount rolled over.  most likely the taxable amount from Box 2a.
15. Complete the interview.

The screens below show a $3,400 distribution, with a $2,000 taxable amount.

[hung05]

Hello

I have just make the roll over 401k to Traditional IRA and then made a partial conversion to ROTH. Can you shine the idea of how to enter this condition?

Thank you

[dmertz]

@hung05 , what you describe are two separate transactions for with you will receive separate Forms 1099-R, one for the distribution that you received from the 401(k) and rolled over to the traditional IRA and another for the Roth conversion from the traditional IRA.  This is different from the transaction that was addressed earlier in this thread where there was only one distribution and the rollover was split into two destination accounts.

In TurboTax you'll enter each of these Forms 1099-R separately and answer the questions that TurboTax asks.  You'll then click the Continue button on the page that the lists the Forms 1099-R that you have entered and answer additional questions.  If the distribution from the 401(k) included after-tax funds, you'll need to click the EasyGuide button that TurboTax presents after you indicate that you have nondeductible contributions, mark the box to indicate that you rolled over after-tax funds from an employer plan, then indicate the amount.  TurboTax will then include this amount on line 2 of Form 8606.