No, if your 1099-R has Code 2 marked in Box 7, you cannot change it. You can request a corrected 1099-R from your old company if it was for a direct rollover. A direct rollover is only if your old company moves the money directly to your new retirement account. If they gave the money to you which you then deposited into the new account within 60 days, it is an indirect rollover. If the rollover was indirect, you can still avoid tax on the withdrawal when you enter it into TurboTax: Search for 1099-R and select the Jump to link in the search results. Continue through the screens to import or enter your 1099-R form. When asked Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and Continue. On the next screen, Did you roll over all of this (Box 1) to another retirement account? answer Yes, I rolled over to an IRA or other retirement account (or returned it to the same account) and Continue. If you did not roll over the entire amount, select No and enter the amount you did deposit into your new 401(k). Pay attention that the entire Box 1 amount must be rolled over to avoid any taxes or penalties on the distribution. If your prior plan withheld some taxes, that amount would have to have also been deposited into the new 401(k). For example, if you took $30,000 out of your retirement account and they gave you $24,000 and withheld $6,000 for taxes, you would have to deposit $30,000 into the new 401(k) to answer Yes.

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Can I mark an Indirect rollover as a direct rollover even if distribution company mark 1099-R incorrectly as a distribution with execeptions.

Forum|Forum|4 years ago
February 2, 2022
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TurboTax Deluxe Online

Best answer by RaifH

No, if your 1099-R has Code 2 marked in Box 7, you cannot change it. You can request a corrected 1099-R from your old company if it was for a direct rollover.

A direct rollover is only if your old company moves the money directly to your new retirement account. If they gave the money to you which you then deposited into the new account within 60 days, it is an indirect rollover.

If the rollover was indirect, you can still avoid tax on the withdrawal when you enter it into TurboTax:

Search for 1099-R and select the Jump to link in the search results.
Continue through the screens to import or enter your 1099-R form.
When asked Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and Continue.
On the next screen, Did you roll over all of this (Box 1) to another retirement account? answer Yes, I rolled over to an IRA or other retirement account (or returned it to the same account) and Continue. If you did not roll over the entire amount, select No and enter the amount you did deposit into your new 401(k).

Pay attention that the entire Box 1 amount must be rolled over to avoid any taxes or penalties on the distribution. If your prior plan withheld some taxes, that amount would have to have also been deposited into the new 401(k). For example, if you took $30,000 out of your retirement account and they gave you $24,000 and withheld $6,000 for taxes, you would have to deposit $30,000 into the new 401(k) to answer Yes.

R

RaifHAnswer

No, if your 1099-R has Code 2 marked in Box 7, you cannot change it. You can request a corrected 1099-R from your old company if it was for a direct rollover.

A direct rollover is only if your old company moves the money directly to your new retirement account. If they gave the money to you which you then deposited into the new account within 60 days, it is an indirect rollover.

If the rollover was indirect, you can still avoid tax on the withdrawal when you enter it into TurboTax:

Search for 1099-R and select the Jump to link in the search results.
Continue through the screens to import or enter your 1099-R form.
When asked Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and Continue.
On the next screen, Did you roll over all of this (Box 1) to another retirement account? answer Yes, I rolled over to an IRA or other retirement account (or returned it to the same account) and Continue. If you did not roll over the entire amount, select No and enter the amount you did deposit into your new 401(k).

Pay attention that the entire Box 1 amount must be rolled over to avoid any taxes or penalties on the distribution. If your prior plan withheld some taxes, that amount would have to have also been deposited into the new 401(k). For example, if you took $30,000 out of your retirement account and they gave you $24,000 and withheld $6,000 for taxes, you would have to deposit $30,000 into the new 401(k) to answer Yes.