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Solved

Rollover contribution limiting SALT deduction

Forum|Forum|3 months ago
March 28, 2026
1 reply
11 views

In 2025, I rolled over one 401k into that for my current employer. Turbo tax considers that this (non-taxable) income puts a cap on my SALT deductions. When only taxable income is included,this is not the case. How do I get Turbo tax to get it right?

Best answer by MaryK4

To fix the 401(k) rollover error in TurboTax, you must ensure the 1099-R is marked as a non-taxable rollover, which prevents it from inflating your AGI and triggering an incorrect SALT deduction cap. Navigate to the 1099-R entry, select "I rolled over this money to an IRA or other retirement account," and confirm code 'G' is in box 7.

A rollover is not taxable income, but if it is not properly marked as a rollover, TurboTax includes the entire amount in your Adjusted Gross Income (AGI). Review your Form 1040 to confirm that the total rollover amount appears on line 5a (Gross Distribution), but that $0 (or only the taxable portion, if any) is listed on line 5b (Taxable Amount).

MaryK4Answer

Level 15

To fix the 401(k) rollover error in TurboTax, you must ensure the 1099-R is marked as a non-taxable rollover, which prevents it from inflating your AGI and triggering an incorrect SALT deduction cap. Navigate to the 1099-R entry, select "I rolled over this money to an IRA or other retirement account," and confirm code 'G' is in box 7.

A rollover is not taxable income, but if it is not properly marked as a rollover, TurboTax includes the entire amount in your Adjusted Gross Income (AGI). Review your Form 1040 to confirm that the total rollover amount appears on line 5a (Gross Distribution), but that $0 (or only the taxable portion, if any) is listed on line 5b (Taxable Amount).

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