401k In-Plan Roth Conversion 1099-R with no taxable amount

[gramm15]

Hi,

I received an 1099R from doing an inplan roth conversion from traditional 401k to Roth 401k. There is code G however no taxable amount. I believe this is an error. However if this is not corrected, how would the converted amount be characterized as if I were to withdraw it down the road?

Thanks.

 

[jasun]

@gramm15 Was the converted money originally put into the 401k as a "pre-tax deferral" or an "after-tax contribution"?

If you had been making only pre-tax contributions into your 401k and converted that to Roth, then you're right that something is wonky. I wasn't aware that plans commonly allowed that type of conversion while you're still enrolled in the plan, but it's not something I've dug into for my own retirement accounts.

But if you'd been doing "after tax" contributions followed by an in-service conversion to Roth, that's the basis of the "mega backdoor Roth". In that case, AFAIK the numbers and code shown on your 1099-R would be correct. After tax contributions are (as the name implies) already taxed, so are not taxed again when converted, so $0 for 'taxable amount" would be correct. And it appears that type of in-plan conversion still uses code G.

 

[breety]

@gramm15

There is code G however no taxable amount.

Is the box that says “taxable amount not determined” also checked?

However if this is not corrected, how would the converted amount be characterized as if I were to withdraw it down the road?

Ultimately it’s on you to make sure it’s reported correctly on your Form 1040 as taxable income

 

[gramm15]

@breety nope "taxable amount not determined" is not checked