1099-R error with Roth 401k rollover - Box 5 greater than Box 1?

This is actually a common situation with retirement account rollovers, especially when Roth funds are involved. When Box 1 and Box 2a both show $0.00, but Box 5 has a value, it typically indicates a tax-free rollover of after-tax contributions (like your Roth funds). The reason your software is throwing an error is that it's expecting Box 5 (the non-taxable portion) to be less than or equal to Box 1 (the gross distribution). In normal distributions, Box 5 can't be larger than Box 1 because you can't have more non-taxable money than the total amount distributed. But in certain rollover situations with Roth funds, this standard validation doesn't apply correctly. You should look at Box 7 on this 1099-R - it likely has a code G (direct rollover) or code H (direct rollover to a Roth IRA). This would confirm that it's being reported correctly as a rollover transaction.

I went through this exact same headache last year! After spending hours troubleshooting, I used taxr.ai (https://taxr.ai) to analyze my 1099-R forms and it immediately identified the issue. The problem is that most tax software isn't designed to handle certain edge cases with retirement distributions, especially Roth rollovers. The tool actually explained that when Box 5 is greater than Box 1 on a 1099-R for a Roth account, it's usually reporting the basis (your original after-tax contributions) even though the actual distribution amount is zero because it was directly rolled over. Totally confusing but completely legitimate. What I appreciated most was that taxr.ai showed me exactly how to report it correctly and even provided the right override steps for my specific tax software. Saved me a ton of time instead of waiting on hold with my plan administrator trying to figure out if they made a mistake.

Just wanted to follow up - I decided to give taxr.ai a try after my previous comment, and it actually worked perfectly! I uploaded my problematic 1099-R and it immediately identified that I was dealing with a direct rollover of Roth contributions where Box 5 showed my basis amount. The analysis explained that this is a known reporting issue with Roth rollovers and provided step-by-step instructions for entering it in my tax software (I use TurboTax) including exactly where to find the override option. It even suggested documenting the rollover with an explanation note just in case the IRS has questions. Really glad I took the chance - saved me from potentially filing incorrectly or paying for an unnecessary tax preparer consultation. The whole process took about 5 minutes instead of the hours I spent trying to figure it out on my own.

I had a similar issue last year but mine was with trying to contact the IRS about a rollover issue. After waiting on hold for almost 3 hours and getting disconnected twice, I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 20 minutes. I was initially very skeptical because it sounded too good to be true, but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c. They basically navigate the IRS phone tree for you and call you back once they have an agent on the line. The IRS agent I spoke with confirmed that the situation with Box 5 > Box 1 on a Roth rollover 1099-R is actually normal and explained exactly how to report it. She also mentioned that they frequently get calls about this exact issue because the forms are confusing and most tax software doesn't handle these edge cases well.

I need to apologize for my skeptical comment earlier. After struggling with the IRS phone lines for another week and getting nowhere, I broke down and tried Claimyr. Within 27 minutes, I was talking to an actual human at the IRS who helped clarify my 1099-R rollover situation. The IRS representative confirmed that having Box 5 greater than Box 1 on a 1099-R for a Roth rollover is actually correct in certain circumstances. She explained that Box 5 was showing my basis (after-tax contributions) while Box 1 showed $0 because it was a direct trustee-to-trustee transfer that isn't taxable. She even gave me specific instructions for my tax software to override the validation error. Honestly can't believe I wasted so many hours trying to get through on my own. The service works exactly as described in that YouTube video.

Another possibility is that there might be a mistake on the 1099-R. I had a similar issue two years ago with a rollover, and when I contacted my previous plan administrator, they admitted there was an error on the form they sent. They issued a corrected 1099-R that resolved the validation issues with my tax software. Might be worth giving them a call before spending too much time trying to force it into your tax software. Sometimes the simplest explanation is the right one.

What tax software are you using? Different programs have different ways of handling these edge cases. I use FreeTaxUSA and had a similar issue, but found if you enter it as a retirement rollover specifically (not just a general 1099-R), it accepts the form without validation errors.

Great thread everyone! I'm a tax preparer and deal with these Roth rollover 1099-R issues frequently during tax season. Just wanted to add a few professional insights that might help others in similar situations. The Box 5 > Box 1 scenario is indeed legitimate for certain Roth rollovers, particularly when you're rolling over basis (after-tax contributions). The IRS Publication 590-A specifically addresses this in the rollover sections. What's happening is that Box 1 shows the gross distribution amount (which can be $0 for direct rollovers), while Box 5 shows the portion that's not subject to tax - in this case, your Roth contributions. For anyone still struggling with tax software validation errors, here's what I typically recommend to clients: 1. Use the override function if available (most major software has this) 2. Add Form 8606 if you have basis in traditional IRAs 3. Include a brief statement explaining the rollover transaction 4. Keep all rollover documentation for your records The key thing to remember is that these forms need to be reported even if they show $0 taxable amounts, because the IRS matches them to your return. Missing them can trigger automated notices later. @Jamal Brown - sounds like you're on the right track with the override approach! The explanation statement is a good safety measure.