Why there is no tax generated for my traditional 401k to Roth IRA rollover?
In March 2024, I rolled over the money in a traditional 401k account from a different financial company to Roth IRA in Fidelity, and I expected that the rollover will generate tax for 2024. The time comes to Feb 2025, after including from 1099-R sent from the 401k financial company, somehow the rollover does not create any tax in my return. Am I missing anything?
In 1099-R, the Taxable amount is 0, Total distribution in 2b is checked, and Distribution code in item 7 is G. No other positive amount appears on the form except the Gross distribution in item 1.
Comments
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Is "taxable amount not determined" checked?
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No, taxable amount not determined is not checked.
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Hello JoeHsio,
The code in Box 7 of your 1099-R is critical for how the software treats your distribution. You mentioned the Box 7 code was G which is a "Direct rollover to a qualified plan." A Direct rollover to a qualified plan generally means that there will not be any tax consequences. If this had been a conversion from a regular 401(k) to a Roth IRA, then it would generate taxable income and a different code for Box 7. I suggest you check to see if you had a direct rollover or a conversion.
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Okay I found what I was missing.
Fidelity, who holds the Roth IRA account, said the tax consequence of the rollover is being covered in the 1099-R forms for the Roth IRA account.
