How to report after tax 401k rollover to Roth 401k? Thanks!

[szec444]

Hi I know I need to do Form 8606 to report roll over from my individual Traditional IRA to Roth IRA.

But for my Employer Sponsored 401k plan, I have After Tax 401k contribution that I rolled over to Roth 401k, and received a 1099-R.  Since they are both 401k, do I need to report this Roll over to IRS for my 2023 taxes? What forms do I need? Are there any special lines I need to fill out on my tax form? How to do that on Turbo tax?

Thank you so much!!! I appreciate any assistance you would kindly guide me in this matter 🙂

[ThomasM125]

Yes, you need to enter the Form 1099-R information in TurboTax:

1. Go to the personal income section of TurboTax 
2. Find the Retirement Plans and Social Security menu option
3. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
4. Choose Add a Form 1099-R 
5. Choose I'll type it in myself
6. Choose the 1st option to enter distribution from a 401-K  plan, retirement plan, IRA, etc...
7. Enter you Form 1099-R information and answer the questions to allow TurboTax to determine how to enter your pension distribution on your tax return

Depending on which code you have in box 7 of your Form 1099-R, on one of the screens you may need to indicate that the funds were rolled over to a ROTH IRA:

And on another screen you may have to indicate that you made after-tax contributions to your 401-K plan:

Form 8606 will be populated automatically based on the entries you make in the Form 1099-R section.

[szec444]

Thank u so much! I did what you instructed, but no 8606 form was generated. Is it because I don't need to report to IRS if it's in plan after tax 401k directly rolled over to same plan Roth 401K?

Is the 8606 only for reporting roll over to Roth IRA and not for Roth 401k?

Thank u so much for helping me 🙂

[CatinaT1]

Form 8606 is for Nondeductible contributions you made to traditional IRAs.  In your case you would not need this form.

What is IRS Form 8606: Nondeductible IRAs - TurboTax - Intuit

[DXY2021]

Thanks for the info - can you please confirm that the procedure the original poster notes is also called an "in plan roth conversion" ?  

Basically, if I contribute after tax contributions to my 401k and then in plan convert them, the procedure for entering the 1099 R is the same as noted above.   I note the after tax money shows up in my 401k statement as a line item called "in plan roth after tax" Since it's in the 401K i'm assuming this is the same as a "roth 401K" so answering yes to the 2 questions noted above is "yes" right?

I think it's the same but could use a second check on the terminology - thanks so much !

[ThomasM125]

Typically, an in path Roth conversion would mean that you converted pre-tax money in a retirement account to a Roth account, which is after tax. When you do so, you pay tax on the amount converted. 

However, you can contribute after tax dollars to a traditional non-Roth retirement account and then transfer those contributions to a Roth account, which I believe it what you did. In either case, the question you are referring to is did you make non-deductible contributions to your non-Roth retirement account, and the answer would be "yes" as stated in the previous response.

[dmertz]

What the original poster was talking about is technically an In-plan Roth Rollover (IRR).  Some refer to this as a conversion due to the similarity with a Roth conversion from a traditional IRA, but in the tax code the term "conversion" only refers to the movement of funds from a traditional IRA to a Roth IRA.

The Roth account in your 401(k) is referred to in the tax code as a "designated Roth account" in the plan.

When entering the code-G Form 1099-R into TurboTax, answer Yes to the first question asking of the funds were moved to a Roth 401(k) or similar Roth account account (not a Roth IRA).  The taxable amount should be present in box 2a of the form while the nontaxable amount should be present in box 5.