Rollover contribution limiting SALT deduction

[mewalk52]

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?

[MaryK4 · Accepted solution]

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).