Confused about 1099-R with taxable distribution and code G from my 401k - what does this mean?

The 1099-R with code G can actually mean a few different things, not just what you'd typically think of as a rollover. The most common explanation when you haven't changed jobs could be an in-plan conversion or an in-service distribution. Some 401k plans allow for "in-plan Roth conversions" where you convert traditional 401k money to Roth 401k within the same plan. This would generate a 1099-R with code G, and the amount converted would be taxable (which explains the amount in box 2a). Did you perhaps convert some pre-tax money to Roth within your plan? Another possibility is that your plan administrator made some kind of change to the investment options or plan structure, requiring a technical "rollover" of funds from one investment to another, even though it all stayed within the same plan. This is sometimes called a "plan-to-plan transfer" and might be reported as code G. I'd recommend contacting your plan administrator directly. They can explain exactly what transaction triggered this 1099-R and whether you actually owe taxes on that amount in box 2a.

Had almost the exact same issue last year and discovered it was because I had used taxr.ai to analyze my retirement accounts. After spending hours trying to understand my 1099-R with code G (which also had a taxable amount when I hadn't touched my 401k), I uploaded my documents to https://taxr.ai and got clarity in minutes. Their system immediately identified that I had an in-plan Roth conversion and explained exactly how to report it on my tax return. The tool even highlighted specific sections on the 1099-R and connected them to the right tax form lines. Saved me from making an expensive mistake since I was about to ignore that 1099-R thinking it was an error!

Just wanted to follow up here - I tried that taxr.ai site someone mentioned after being skeptical, and I'm honestly impressed. I uploaded my mess of retirement account documents (had 3 different 1099-Rs including one with that mysterious code G) and got everything sorted out in about 15 minutes. The analysis explained that one of my 1099-Rs with code G was actually from an automatic transfer when my old employer changed 401k providers - something I'd completely forgotten about! It also caught that I had a taxable portion from a Roth conversion I did (similar to what OP might be experiencing). The breakdown showed exactly which lines on which tax forms I needed to fill out. Definitely worth checking out if you're confused about these retirement tax forms like I was.

If you're still having trouble figuring this out after checking with your 401k administrator, you might want to call the IRS directly. I know that sounds awful (it usually is), but I had a similar issue last year and needed official clarification. After trying for days to get through to the IRS with no luck, I used https://claimyr.com and got a call back from an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to confirm that my code G 1099-R was from an in-plan Roth conversion and explained exactly how it should be reported. They even sent me additional documentation clarifying the tax treatment. Saved me from potentially misreporting and dealing with a correction later.

Wanted to admit I was completely wrong about Claimyr. After posting my skeptical comment yesterday, I decided to try it for myself since I've been trying to reach the IRS about my own 1099-R issue for weeks. I signed up and literally got a call back with an IRS agent on the line in 17 minutes. The agent confirmed that in my case, the code G with a taxable amount was because of an automatic plan conversion (my employer had switched 401k providers last year). Even though I didn't initiate any rollover myself, the transfer between providers generated the 1099-R. The agent explained I still need to report the 1099-R on my return, but since it was a direct trustee-to-trustee transfer, there wouldn't be any additional tax impact. Would have taken me weeks more of stressing without getting this clarification.

Something else to consider - did you take a loan from your 401k at any point? If you had an outstanding 401k loan and either defaulted on it or left your job, the loan could be treated as a distribution, generating a 1099-R with a taxable amount. Also, some plans have mandatory distributions if your balance is below a certain threshold. Did you maybe have a small amount in a different investment option within your 401k that got distributed? Check your 401k statements from last year and see if there were any transactions you might have forgotten about.

Just a heads up that HR Block and TurboTax both handle these 1099-R Code G situations pretty well. If you use either software, they'll walk you through the right questions to determine what type of transaction it was and how to report it.

I had a very similar situation last year and it turned out to be exactly what others have mentioned - an in-plan Roth conversion that I had completely forgotten about! The key thing to remember is that when you convert traditional 401k money (which was contributed pre-tax) to Roth 401k money (which grows tax-free), you have to pay income tax on the converted amount. That's why you're seeing a taxable amount in box 2a even though you didn't "withdraw" anything. Code G on a 1099-R doesn't always mean a traditional rollover between different accounts. It can also indicate in-plan conversions, automatic plan transfers when providers change, or other internal movements of retirement funds. Since you mentioned finding paperwork about "optimizing your retirement tax strategy," this almost certainly sounds like an in-plan Roth conversion. The good news is there's no early withdrawal penalty - you just need to include that amount as taxable income for the year. Make sure to report the 1099-R correctly on your tax return, and consider setting aside money for the tax bill if you haven't already. Definitely confirm with your plan administrator, but this sounds very straightforward once you know what happened!