1099-R codes for Roth 401(k) and Employer monies distribution

[bvhea]

401(k) plan has terminated participant, age 28 with two years of participation, who elected a lump sum distribution. Monies are Roth, safe harbor match and discretionary profit sharing.

Will two 1099-R forms be needed to report her distribution because of the distribution codes?

First 1099-R for the Roth portion of the distribution:

• Gross Distribution = Roth deferrals plus earnings
• Taxable Distribution = Earnings only
• Federal Income Tax = 20% on Earnings (Taxable Distribution)
• Box 5 = Roth deferrals only
• Distribution code = 1B
• Box 11 = first yr of Roth deferrals

Second 1099-R for Employer monies (SH Match and Disc PS)

• Gross Distribution = SH Match plus Disc PS plus earnings on both
• Taxable Distribution = Gross Distribution
• Federal Income Tax = 20% of Taxable Distribution
• Distribution code = 1

Or should the reporting of this distribution be handled on one 1099-R?

I appreciate any comments.

[Bill Presson]

You'll need two 1099s.

We typically have processed it as two separate distributions and two fees because of the extra work.

[bvhea]

Thanks for confirming this, Bill. I could not find the need for separate 1099-R forms clearly stated in the examples I came across, but it seemed logical, given the different distribution codes. Also, thank you for sharing your approach to processing and fees.