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Posted

Background: 403(b)(9) non-electing church plan, participant wants to convert his pre-tax money ($10K) to a designated Roth account within the same plan.

The plan is getting hung up on "conversion" vs "rollover" when there is no distributable event. I only seem to see the term "in-plan Roth rollover (IRR)" these days, and information I see about "Roth conversions" is generally associated with an IRA to Roth IRA. The 1099R instructions state: An IRR is a rollover within a retirement plan to a designated Roth account in the same plan. Yet, there is no plan consensus. 😕

Three scenarios:

A - Participant is under age 59.5, still employed and contributing.

B - Participant is under age 59.5 and severed from employment.

C - Participant is over age 59.5.

It is agreed that box 2a would be 10K, but there is disagreement as to how this transaction is to be reported in box 7 on 1099R and I am hoping someone could offer clarity (TIA). 

What is the appropriate code(s) for box 7 and is it the same in all three "in-plan" scenarios? 

 

Posted

A--Code 2 (Early distribution, exception applies), G (Direct Rollover)

B--Code 2 (Early distribution, exception applies), G (Direct Rollover)

C--Code 7 (Normal distribution), G (Direct Rollover)

Box 1--$10,000
Box 2a--$10,000
Box 4--$0

Just my thoughts so DO NOT take my ramblings as advice.

Posted

....Artie beat me to editing my response after thinking about it to add the G. I'm blaming it on being late Friday afternoon and March Madness....although I would have still been wrong, because I wasn't going to change the Code 1 from A and B. Sorry

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