Should my pension distribution be taxed if I rolled it over to an IRA?

Forum|Forum|1 year ago
January 31, 2025
1 reply
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I rolled my retirement from the state over to another IRA with an organization but Turbotax is stating that I will owe a tax.

BillM223

No, your pension distribution should not be taxed if it is rolled over to an IRA.

However, you need to tell TurboTax that this is happening.

In the screens after the initial entry of the 1099-R, There are a variety of questions over one to several screens.

One question is "Tell us if you moved the money through a rollover or conversion" (in the Online version - the desktop version may be worded differently).

One or more options below will let you indicate that it was a rollover. Once you check that, the rollover amount will be tax-free.

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pjreichelAuthor

Thanks so much for your reply however, when I went to look over the questions again they appear confusing. The first one asks, "Did you move the money to a Roth IRA?" Mine just went to a regular IRA so I said No.

The second question is, "Did you move this money from a 401(k) to a Roth 401(k)?" Also states: This includes rollovers from a regular 401(k), 403(b), or 457(b) plan to a designated Roth 401(k), 403(b) or 457(b) plan.

The Yes answer states: Yes, I moved the money to a Roth 401(k), Roth 403(b), or a 457(b) plan. Is this the one I should be checking yes? Seems like it should include the term IRA also.

dmertz

Employee

Since the rollover was to a traditional IRA, you should not indicate that is was rolled over to any kind of Roth account. Answer No to these questions.

Given the questions that TurboTax is presenting, it seems that your Form 1099-R has code G in box 7. If so, once you indicate that the rollover was not to any kind of Roth account and the taxable amount shown in box 2a of the From 1099-R is zero. TurboTax will automatically treat the distribution as nontaxable. The gross amount will be included on Form 1040 line 5a but will be entirely excluded from the amount on line 5b with the ROLLOVER notation.