Rollover from 401k to IRA is being called 'Pension and Annuity Distributions' by TurboTax

[Tax_Filer_5050]

Received a 1099-R for rollover from 401k to IRA. Taxable amount $0 as expected. But as I proceed through filing, TT throws up a page with the header 'Here is how your retirement and IRA distributions affect your income.' Then in a short table it has 2 rows

Traditional and Roth IRA distributions

Pension and annuity distributions 

... and 2 columns titled 'Total' and 'Taxable'.

In this 2x2 grid, the amount from 1099-R is listed on the 'Pension and annuity distributions' row. Why? I am not taking a pension or annuity distribution.

Please advise.

[DavidD66]

It is nothing to be concerned about.  The IRS uses two categories/descriptions for distributions from retirement plans:  IRA Distributions and Pensions and annuities, lines 4 and 5 of Form 1040, respectively.  401(k) distributions are not IRAs, so they are included on line 5, Pensions and annuities.  That's just the way it works.  Again, nothing to be concerned about. 

[VolvoGirl]

Only IRA distributions go on the IRA line (1040 line 4).  Everything else goes on the other line and 1040 line 5.  A 401K is not an IRA.   It will show up as 0 taxable on line 5b with Rollover written by it.  

[jpasquale2]

It does without a doubt have an effect and get to state where NJ calls it a pension and levies a state tax (like it’s a withdrawal or income)!! Solve that for me! 

[RogerD1]

If you did a direct rollover from a 401(k) to an IRA, the 1099-R box 7 code will either be G (for traditional 401(k) to traditional IRA) or H (for Roth 401(k) to Roth IRA).  If this is the case for your 1099-R, there should be a 0 or blank entry for box 2a.  This would make it a non-taxable direct rollover.

Once you finish entering the 1099-R details in TurboTax, you'll get asked if you moved the money from a 401(k) to a Roth 401(k) - if this is clicked yes, the distribution will be taxable as a Roth conversion.  If you didn't do that, be sure that you click No I didn't.

The next screen on Where is your distribution from? is to determine how it is handled for NJ purposes - this should be checked as None of the above because this is a rollover and not a distribution out of a retirement account.

You'll get asked if you moved the money to a Roth IRA - if your 1099-R was a traditional 401(k) and you click yes here, that will make the distribution taxable - click No if you moved the money to a traditional IRA.

Following the above steps will not make the 1099-R rollover distribution taxable in New Jersey.