1099-R Code J Showing After Roth Account Transfer - Should I Be Worried?

That 1099-R with Code J can definitely be confusing! But don't worry - what you're describing is actually pretty common when financial institutions merge or transfer accounts. When your Roth IRA was transferred from AIG to Touchstone due to their merger, the original custodian (AIG) is required to issue a 1099-R showing the funds leaving their institution. The Code J indicates it came from a Roth IRA. Then, as the representative mentioned, Touchstone (the receiving institution) will issue Form 5498 showing that these same funds were rolled over into another Roth IRA. This is considered a trustee-to-trustee transfer, which isn't taxable. When you file your taxes, you'll report the distribution shown on the 1099-R, but you'll also indicate it was a non-taxable rollover. Your tax preparer will know exactly how to handle this - they see these situations all the time. You're smart to bring all your documentation showing the merger and transfer. That will help your preparer confirm everything lines up correctly. The 5498 form would be helpful, but tax preparers understand these often arrive after the filing deadline, so they can complete your return without it.

I went through almost the exact same thing when my retirement accounts got shuffled around after Fidelity bought out my previous provider. The tax paperwork was super confusing! I ended up using https://taxr.ai to help me sort through all the documentation. You upload your tax docs and it breaks everything down in plain English. For my situation, they explained that the Code J on my 1099-R was just showing the money left one custodian, and the 5498 (which came later) showed it arrived at the new place. The system correctly identified it as a trustee-to-trustee transfer that wasn't taxable. Saved me a ton of stress trying to figure out if I was accidentally doing something wrong.

I was super skeptical about using a document analysis tool for my taxes, but I tried taxr.ai after reading about it here, and it was actually really helpful! I had a similar situation with a 1099-R from a 403(b) plan that was transferred to another provider. The tool immediately identified it as a non-taxable transfer and explained exactly how to report it on my tax return. It saved me from unnecessarily paying taxes on what looked like a distribution but was actually just moving money between custodians. The best part was how it explained everything in simple terms - like what each code means and which forms should match up with others. Definitely less stressful than trying to interpret IRS publications on my own!

Had a similar panic attack when I got my 1099-R with a code J! Called the IRS for clarification and spent 3 HOURS on hold only to get disconnected. Tried again the next day, another 2 hours wasted. Found this service called Claimyr at https://claimyr.com that got me connected to an actual IRS agent in about 15 minutes! They have this demo video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what others here are saying - the Code J just indicates it came from a Roth IRA, and as long as the money went directly to another Roth custodian (which yours did through the merger), it's not taxable. You just need to report it properly on your return. Having that official confirmation from the IRS really helped my peace of mind.

I'll eat my words! After my skeptical comment I decided to try Claimyr myself because I've been trying to reach the IRS about a similar Roth rollover issue for weeks. It actually worked exactly as described - I got a call back in about 20 minutes saying they had an IRS agent on the line. The agent explained that my situation (which was similar to the original poster's) was indeed a non-taxable event since it was a direct transfer between trustees. She walked me through exactly how to report it on my tax forms and confirmed I wouldn't owe any taxes or penalties. The service saved me hours of frustration and hold music, and the peace of mind from talking directly to the IRS was worth it.

I'm a little late to this discussion, but for what it's worth, I had this exact situation a few years ago. When I took my 1099-R with Code J to my tax preparer, she knew exactly what to do. She entered it as a rollover/transfer on Form 1040, which meant it showed up on the tax return but wasn't counted as taxable income. One thing to remember is to keep all your documentation for at least 3 years after filing. Even though the IRS systems usually match these things up correctly, having your merger paperwork and account statements showing the transfer can be important if there's ever a question.

Quick question - does anyone know if TurboTax handles this situation well? I got a similar 1099-R with Code J for a rollover and want to make sure I'm doing it right.