Solved: Would I be liable to pay cash-out tax on $ that my old employer put into the account late?
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Would I be liable to pay cash-out tax on $ that my old employer put into the account late?

I received a few 1099-Rs after rolling over my 401k into a traditional and Roth IRA. Two of the 1099-Rs show no taxable amounts, but I also received a third for $171.15 taxable. This money was put into my old 401k account, presumably from the match on my last paycheck, in the form of company stock. I had instructed everything to be rolled over to my personal IRAs but it appears that they cashed out just this last $171.15? I have a "rollover deposit" on my personal IRA for $128.20 (171.15 - state tax - 20%). I never received a check as the money seems to have been "cashed out" directly into my IRA. How should I handle this? 

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Level 15

Would I be liable to pay cash-out tax on $ that my old employer put into the account late?

Enter the $171.15 Form 1099-R and in the follow-up indicate that you rolled the money over to another retirement account and that you rolled over only $128.20, not the entire distribution.  The $42.95 withheld for taxes is subject to tax and possible early-distribution penalty.

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Level 15

Would I be liable to pay cash-out tax on $ that my old employer put into the account late?

Enter the $171.15 Form 1099-R and in the follow-up indicate that you rolled the money over to another retirement account and that you rolled over only $128.20, not the entire distribution.  The $42.95 withheld for taxes is subject to tax and possible early-distribution penalty.

View solution in original post

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