After Tax Transaction Reported Incorrect on 1099?
Hello-
My client moved after-tax contributions ($1,300) and earnings ($200) from their 401k to their Roth last year.
They received a single 1099R with $1,500 in Box 1, $0 in Box 2a, Box 2b not checked, $1,300 in Box 5 with distribution code G.
It appears to me that the 1099 is reported incorrectly as the earnings portion ($200) should be taxable.
1. Is the 1099 reported incorrectly?
2. Should there have been a separate 1099 listing the earnings as taxable?
2. Does the client need to get a new 1099 or just enter it in their tax prep software as if there was $200 in Box 2a?
Thank you!
Permalink Submitted by Alan - IRA critic on Tue, 2021-03-16 17:57
Yes, it is incorrect. Plans have been making this error for years, apparently because so few rollovers go to a Roth IRA compared to a TIRA. Client should request a corrected 1099R, but if they do not want to wait to file could just enter the 200 in 2a and include an explanatory statement. If the plan then refuses to issue a corrected 1099R, client should file a 4852, which is a hassle. See 4852 Inst.