Roth In Plan Conversion

[california1977]

Hello,

I signed up for Roth-In-Plan conversion last year and contributed some After-tax money towards it. My employer noted that amount on W2 as "401K After Tax Contribution".  I have not been sent 1099R or any other form regarding the same.

So, here's my questions:

1) Do I need to let IRS know about it? W2 has it, so IRS knows it already? 

2) How do I enter this information in Turbotax (Premier)? 

Thanks in advance for the help!

[macuser_22 · Accepted solution]

If you mean that your Traditional 401(k) plan had non-deductible money in it and that was moved to a 401(k) Roth (Designated Roth), then you shroud have received a 1099-R with a code G in box 7,  the amount moved in box 1, a zero amount in box 2a and the amount of non-deductible (after-tax) amount in box 5 to report it.

If last year then the 1099-R should have been sent to you no later than Jan 31, 2022.

If you meant something else then please explain more.

[Opus 17]

Since we are talking about a 401(k), there are two things that can be happening.

1. You can contribute money to a designated Roth option within the 401(k) plan.  This is non-deductible for now, but won't be taxed when you withdraw it in retirement.  It is only reported on your W-2 in box 12 with code AA. 

2. You can convert money from a pre-tax 401(k) account to a designated Roth account.  When you convert money from pre-tax to Roth, you must pay income tax on the amount converted.  And the conversion will be reported on a 1099-R form that you get from the plan custodian.

It sounds like you contributed to the Roth option.  Did you also convert from pre-tax to Roth?  That is not clear from your question.

[california1977]

Thank you for the response! You are right, Fidelity did generate an 1099-R but they didn't send it to me via mail (thanks to the E-notification that I signed up for). Also, the 1099R was available under the 401K plan of Fidelity, so I wasn't able to see it when I looked around the first time and had to call their customer service to get to it. Once I got the 1099R, I was able to update my return on TurboTax and all is good now!

[california1977]

This is a 401k Plan offered by Fidelity, wherein the after tax money is converted automatically to Roth. It took me some time that (see my response to earlier comment) to figure out that I needed to get a separate form (1099R) from Fidelity regarding it and I just wasn't able to get to it.

[ncet]

I got 1099R from Fidelity for the same (after-tax money in-plan automatic conversion to Roth).

According to IRS instruction, entering "rollover" next to line 5b is needed. But couldn’t figure out how …

[DanaB27]

After you enter your Form 1099-R you will get follow up questions to indicate that you moved the funds into the Roth:

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. On the "Did you move this money from a 401(k) to a Roth 401(k)?" screen answer "Yes"
4. On the "Did you move the money to a Roth IRA?" screen answer "No"

{Edited 2/26/2022 |1:29am PST|

@ncet

[ncet]

Hi,

Roth-In-Plan conversion roll after-tax money to Roth account within 401k plan, it doesn't involve Roth IRA...

[DanaB27]

Please see my above edit. I apologize for misreading your question.

@ncet 

[ncet]

Thank you.

## This doesn't work even though it is automatic after-tax contribution rollover into a designated Roth 401(k) account within the 401k plan.

Yes. the money rolled over to a designated Roth 401(k) or Roth 403(b) account.

Yes. I made after-tax contributions to a Roth 401(k) or Roth 403(b) or governmental 457(b) plan.

## This WORKS. 1040 5b will now show "rollover".

No. the money didn't rolled over to a designated Roth 401(k) or Roth 403(b) account.

No, this money wasn't rolled over to a Roth IRA account.

## BUT, in form 1099-R Additional Distribution Information -> Rollovers, Roth Conversions, Roth Rollovers, and Recharacterizations: The amount is shown in B4 "Amount of this distribution that may be rolled or converted to a Roth IRA" ... kinda confusing, Isn't this IRR (B7) since box 7 code is "G"?

[california1977]

Yes, Box 7, Code G is what I have in my returns for this one.

[RobertB4444]

@california1977  Code G is for a rollover.  It will be entered in to your tax return but will not be taxed.

[california1977]

That's right! No taxes incurred on it.

[coto1975]

@DanaB27 Assuming it's for an in-plan roth 401k conversion, when I answered "Yes" to "Did you move this money from 401k to a Roth 401k?" then I got the follow-up question "Did you make after-tax contributions to a 401(k), 403(b), or 457(b) plan?" which I answered "Yes". 

Those were my answers for an in-plan Roth 410 k conversion using after-tax contributions but please let me know if I got that wrong.

Also, can you please advise whether we need to enter anything under Deductions and Credits for in-plan Roth 401k (not IRA) conversion using after-tax contributions?

For what it's worth, if I had answered "No" to "Did you move this money from 401k to a Roth 401k?" then I would get "Did you move the money to a Roth IRA?".

Thank you

[DanaB27]

Yes, you answered the follow-up questions correctly for an in-plan Roth 401(k) conversion using after-tax contributions.

No, you don't enter anything under Deduction & Credits. Roth Conversions are not entered in the IRA contribution section. Only direct contributions to the traditional or Roth IRA are entered here. 

@coto1975