Write-up on Roth 1099-R Codes?

[austin3515]

Can anyone point me to a good write-up of what codes to use for Roth distributions.  There are dozens of combinations and permutations (maybe I exaggerate).  Qualified/nonqualified, rollover/non-rollover, Code 1,2,7 etc.  For example I cannot find even in the instructions how to report a non-rollover qualified distribution.  The instructions just don't say what to do.

What I need is a chart that goes through the scenarios and I can pick the codes.

Maybe I'm overthinking it and someone can set me straight 

[BG5150]

Don't even put codes.  Let the IRS figure it out!  ;)

[Lou S.]

Isn't that covered in the 1099-R instructions under the section "Guide to Distribution Codes"?

https://www.irs.gov/pub/irs-pdf/i1099r.pdf

Chart begins on P15 of the instructions.

 

 

[austin3515]

Yeah that will work!

And another thing--When do I need to add the cumulative contributions and first year of contributions. I think it's different depending on rollover not rollover, qualified vs not qualified. 

I think this could be really quite the table...

[austin3515]

Lou S, you mis-understood, I meant something in English!  

For example, if you can find the explanation for precsieliy how to complete a 1099-R for a qualified distribution I'll be thrilled.  What codes? Taxable amount 0? Do I fill in first year/cumulative Roth?  The list goes on!!

[Lou S.]

I think your question is covered on page 10 of the instructions "Designated Roth account"

[Lou S.]

1 minute ago, austin3515 said:

Lou S, you mis-understood, I meant something in English!  

For example, if you can find the explanation for precsieliy how to complete a 1099-R for a qualified distribution I'll be thrilled.  What codes? Taxable amount 0? Do I fill in first year/cumulative Roth?  The list goes on!!

It's in English alright. Whether or not it is easy to follow is up for debate.

[austin3515]

45 minutes ago, Lou S. said:

I think your question is covered on page 10 of the instructions "Designated Roth account"

Nope! It's the one obvious example they chose not to include...

[Lou S.]

1 hour ago, austin3515 said:

Nope! It's the one obvious example they chose not to include...

LOL. Are you talking a qualified distribution after 5 years and 59.5?

I'd think the code would simply be B.

Gross amount would be the check

Taxable amount would be 0

Cumulative contributions and 1st year of distribution would be whatever they are.

But it seems like they could make it clear by having a similar code Q for retirement plans like they do for Roth-IRA. In that case you don't use any other code so I'm assuming B with no other code is what you'd report but hell if I know for sure.

I see what you mean.

[austin3515]

The code Q for the IRA is what it makes it so galling...  I wonder if they said "well there are more IRA distributions than 401ks so we'll use the the Q for those.  But now we have no other appropriate letter for the same kind of distribution from a 401k so let's just not address it."

 

[Bird]

I'm going to hijack this...anyone know how to code a regular pre-tax distribution that is going to a Roth IRA?

[401_noob]

I think we usually use code G and the taxable amount is the amount being rolled over since it is going into a Roth IRA.

[Bird]

5 minutes ago, 401_noob said:

I think we usually use code G and the taxable amount is the amount being rolled over since it is going into a Roth IRA.

Makes sense; I was hung up on a secondary code like 7 or 2 but you're not supposed to use them with G.  But if you say it is taxable then I guess that takes care of it...Thanks.

[AlbanyConsultant]

[Not to resurrect this, but...]

This is the way we handle them, but I just had a CPA (who I generally trust) tell me that it's wrong when he saw that we did this for two 2020 distributions.  According to him, for someone who is over 59.5 we should be using code 7, and for someone under we should be looking at codes 1 or 2 as applicable.  And I see something to support that here.  In this instance, the two participants (one 60+, the other not) are taking in-service distributions.

I guess the question is what takes precedence?  Is this a "Roth IRA conversion" as described in Code 7, or a "direct rollover from a qualified plan" as described in Code G?

I just called American Funds and confirmed with their distribution department that they would do this as a Code G.