In-Service Distribution

Hello,

Client, age 64, working, has 401k Plan and is going to do an in-service distribution into her Rollover IRA for better investments.

Accordingly, how does an in-service distribution get reported on a 1099-R?

Thanks!

Jason



This should be done by direct rollover to avoid withholding. The 1099R is coded G (direct rollover). Client then reports this on lines 4c and 4d of Form 1040, indicating “rollover” next to 4d.



client 64 has a 401k thats not performing. we have discussed an inservice disrtibution. What are the parameters abnd can we just set up an IRA rollover? looking for directions…



The plan provisions will determine what portions of the balance can be distributed as a non hardship direct rollover. The only IRS requirement is that client’s elective deferrals are not allowed to be distributed prior to age 59.5. Therefore, client needs to check with the plan administrator.



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