1099-R distribution code 8 roll to a Roth?
Can a 401k distribution that is reported as a code 8 on the 1099-R be indirectly transferred to a Roth IRA?
This distribution happened because the employer failed the non-discrimination ADP test for 2021 deferrals.
I understand that it cannot be rolled into another tax deferred IRA. However, the distribution will be taxable for 2022 income, just as an ordinary 401k-to-Roth conversion would be taxed. Can this distribution be put into a Roth?
Permalink Submitted by Alan - IRA critic on Thu, 2022-03-24 02:57
This Code 8 reports the distribution of excess contributions to the plan. These amounts are never eligible for rollover and are taxable depending on the nature of the contribution. While a rollover cannot be done, you can always use the money to fund a regular TIRA or Roth IRA contribution.