One 1099-R Form for Two Rollovers in TurboTax and H&R Block

When you do a direct rollover from the pre-tax account in a workplace retirement plan to a Traditional IRA, you’ll get a 1099-R form after the end of the year that shows the rollover isn’t taxable. When you do a rollover from the pre-tax account to a Roth account, you’ll get a 1099-R form after the end of the year that shows a taxable amount.

Both of these 1099-R forms are straightforward. It’s either taxable or not taxable. You enter the 1099-R form in your tax software and tell it whether the rollover went to a Traditional account or a Roth account.

Combined 1099-R for Mixed Rollovers

When you do a mix of two or more rollovers in the same year — one to Traditional and one to Roth — your plan administrator may issue a combined 1099-R form for both rollovers. The combined 1099-R form shows that only a portion of your rollovers is taxable.

Example: Suppose you rolled over $30,000 to a Traditional IRA and $20,000 to a Roth account from the pre-tax account in your workplace retirement plan. You may get a 1099-R form that looks like this:

Box 1 Gross Distribution$50,000Box 2a Taxable Amount$20,000Box 2b Taxable amount not determinednot checkedBox 5 Employee contributions/Designated Roth
contributions or insurance premiums$0Box 7 Distribution code(s)GBox 7 IRA/SEP/SIMPLE checkboxnot checkedA combined 1099-R form

This 1099-R form is correct. It shows that a total of $50,000 came out of the plan. $20,000 is taxable because it went into a Roth account and the other $30,000 isn’t taxable because it was rolled over to a Traditional IRA.

Split 1099-R Form for Tax Software

Tax software such as TurboTax, H&R Block, or FreeTaxUSA sometimes has difficulty in dealing with a combined 1099-R form like this. The software asks you whether the money went to a Roth account. If you answer “Yes” it treats the entire $50,000 as taxable. If you answer “No” it treats the entire $50,000 as not taxable.

The software assumes that a rollover went into either a Traditional IRA or a Roth account but not both on the same 1099-R form. The trick to deal with this deficiency in the tax software is to split the combined 1099-R form into two — one for the rollover to the Traditional IRA and another for the rollover to the Roth account.

If you imported the combined 1099-R form, delete it and enter two 1099-R forms manually. Use the same payer name, address, and tax ID for both 1099-R forms.

You enter this 1099-R form for the rollover to a Traditional IRA:

Box 1 Gross Distribution$30,000Box 2a Taxable Amount$0Box 2b Taxable amount not determinednot checkedBox 5 Employee contributions/Designated Roth
contributions or insurance premiums$0Box 7 Distribution code(s)GBox 7 IRA/SEP/SIMPLE checkboxnot checkedA 1099-R Form for Rollover to Traditional IRA

You tell the software that this rollover went to a Traditional IRA. The software will make it not taxable.

Then you enter another 1099-R form for the rollover to a Roth account:

Box 1 Gross Distribution$20,000Box 2a Taxable Amount$20,000Box 2b Taxable amount not determinednot checkedBox 5 Employee contributions/Designated Roth
contributions or insurance premiums$0Box 7 Distribution code(s)GBox 7 IRA/SEP/SIMPLE checkboxnot checkedA 1099-R Form for Rollover to Roth Account

You tell the software that this rollover went to a Roth account. The software will make it taxable.

If your combined 1099-R form has a positive number in Box 5 because you made non-Roth after-tax contributions (“mega backdoor Roth“), include it on the applicable 1099-R form depending on whether the non-Roth after-tax contributions were rolled over to a Traditional IRA or a Roth account.

The two manually split 1099-R forms added together have the same numbers as the original combined 1099-R form. You’re splitting it only because the tax software isn’t smart enough to handle the combined 1099-R. The numbers are combined again on your 1040 tax form. It will show that you’re paying tax on only the portion that you rolled over from a pre-tax account to a Roth account.

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