Form 1099 Box 7 on a backdoor Roth
My earned income disqualifies me for a Roth IRA contribution.
I made a $6,000 non-deductible TIRA contribution in 2021.
The day after the the non-deductible TIRA contribution, I converted my $6,000 TIRA to a Roth IRA (I completed my backdoor Roth). The TIRA and the Roth IRA are with the same custodian.
I only have the one TIRA.
It had a $0.000 balance prior to the 2021 non-deductible contribution.
What code should be in Box 7 of my 2021 Form 1099-R?
The custodian put code 2.
I thought it should be code G.
Thank you in advance for your help.
Permalink Submitted by Alan - IRA critic on Thu, 2022-05-19 18:18
Code 2 is correct. Code G never applies to IRA to IRA transactions. Code 2 reflects the penalty exemption due to conversion and that you are under 59.5. If you instead used a 60 day rollover to convert, then Code 1 applies because the TIRA custodian is not sure that you converted.