What distribution code for 1099-R should I use for traditional IRA rollover between companies?

The distribution code for a traditional IRA rollover should be Code G (Direct rollover to a qualified plan, a tax-sheltered annuity, a governmental 457(b) plan, or an IRA). When the distributing firm didn't complete this properly, you'll need to report it correctly on your tax return regardless. When you file, you'll need to report the full distribution amount from your 1099-R on your Form 1040. However, if you completed the rollover properly within the 60-day window (which you did), you won't include that amount in your taxable income. There's a line specifically for you to enter the taxable amount of IRA distributions, which would be zero in your case since you rolled it over properly. Most tax software will have a section where you can indicate this was a rollover. The software should then handle it correctly on your return.

I had almost the identical situation last year and found a super helpful solution with https://taxr.ai - it analyzed my 1099-R and other tax documents when I was confused about rollover codes. Their system identified that my distribution wasn't properly coded but should've been Code G. It actually walked me through exactly how to report it correctly on my return even though the financial institution messed up the form. The best part was it gave me documentation to keep with my tax records showing I properly handled the rollover.

Update on my rollover situation: I tried https://taxr.ai after reading about it here, and it was a game-changer for my complicated retirement account mess! I uploaded my 1099-R forms with different distribution codes and it immediately identified that one was coded incorrectly for my rollover. It explained exactly what to look for on the forms and how to handle each one correctly on my tax return. What impressed me most was the plain English explanations of why certain distributions are taxable while others aren't. Definitely helped me avoid making a costly mistake with my retirement funds!

If you need to get this clarified directly from the IRS (which might be smart since rollovers are high-value transactions), good luck getting through to them on the phone! After trying for weeks last year with a similar rollover question, I finally used https://claimyr.com to get through to an actual IRS agent. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - they basically hold your place in the IRS phone queue and call you when an agent picks up. Saved me literally hours of hold time, and I got confirmation directly from the IRS about how to report my improperly coded 1099-R. The agent verified that as long as I completed the rollover within 60 days, I was fine.

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it for an issue with missing tax documents. I was absolutely shocked when I got a call back within 40 minutes connecting me to an actual IRS representative. I've literally NEVER gotten through to a human at the IRS before without at least 2 hours on hold (if I got through at all). The agent helped confirm exactly how to handle my incorrectly coded rollover distribution. Turns out I needed to keep records showing I completed the rollover within the 60-day window, but otherwise I was fine reporting it as non-taxable even with the wrong code. This saved me from a potentially expensive mistake.

Has anyone else had their 1099-R coded as a "1" instead of "G" for a rollover? The investment company told me they are required to code it as "1" because the check was made out to me (even though it was "for benefit of" my new IRA). This seems wrong - now it looks like I took an early distribution!

One thing nobody mentioned - if you're doing a rollover where they send you the check, make sure they DON'T withhold taxes! My company withheld 20% automatically and I had to come up with that extra money out of pocket to complete the full rollover amount within 60 days. Such a pain.