On a Roth conversion, the Box 7 code on your 1099-R depends on where the money came from and how old you were. A conversion from a traditional, SEP, or SIMPLE IRA is reported with Code 2 if you were under 59½ and Code 7 if you were 59½ or older. A direct rollover of pre-tax money from a 401(k), 403(b), or governmental 457(b) into a Roth IRA is reported with Code G. A direct rollover from a designated Roth account (a Roth 401(k) or Roth 403(b)) into a Roth IRA uses Code H.
The Three Code Scenarios
Only three code scenarios cover a Roth conversion. The custodian picks one based on the account the money left, not the account it landed in.
Traditional IRA to Roth IRA: Code 2 or Code 7
When you convert a traditional IRA to a Roth IRA, the custodian uses Code 2 (“early distribution, exception applies”) if you were under 59½, and Code 7 (“normal distribution”) if you were 59½ or older.1Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 The IRA/SEP/SIMPLE checkbox in Box 7 should also be checked.
Both codes signal to the IRS that the 10% early withdrawal penalty does not apply to the converted amount. Code 2 does that work explicitly by naming an exception; Code 7 does it by identifying a distribution taken after 59½, where the penalty is not in play to begin with. Either code is correct for its age bracket. What you should not see is Code 1 (“early distribution, no known exception”) on a conversion, because that code invites the IRS to assess the 10% penalty.
These same codes apply whether the conversion moves between two institutions or happens inside the one that already holds the account. The mechanics of the transfer don’t change the code.
Pre-Tax Employer Plan to Roth IRA: Code G
If you do a direct rollover of pre-tax money from a 401(k), 403(b), or governmental 457(b) into a Roth IRA, the plan administrator reports it with Code G.1Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 Code G covers direct rollovers from employer plans to eligible retirement plans, and a Roth IRA counts. The taxable amount lands in Box 2a, and any after-tax basis you had in the plan shows up in Box 5.
Code G by itself does not tell you whether the rollover was taxable. It tells you the mechanism was a direct trustee-to-trustee move. For pre-tax dollars going into a Roth IRA, the conversion is taxable and Box 2a will reflect that. For pre-tax dollars going into a traditional IRA, Code G also applies, but Box 2a is zero. The code is the same; the taxable amount is what distinguishes the two.
Designated Roth Account to Roth IRA: Code H
Code H is narrower. It applies specifically to a direct rollover from a designated Roth account, such as a Roth 401(k) or Roth 403(b), into a Roth IRA.1Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 Because the money was contributed on an after-tax basis, Box 2a shows zero. Nothing is taxable, and no penalty exposure follows from the move itself.
The distinction between G and H catches people who have both a pre-tax and a Roth balance inside the same 401(k). The pre-tax portion moving to a Roth IRA is Code G and taxable. The Roth portion moving to the same Roth IRA is Code H and not taxable. Two separate 1099-Rs are the usual result, one for each source.
Code R Is Not a Conversion Code
A recurring source of confusion is Code R, which some people expect to see on a conversion. It doesn’t belong there. Code R means “recharacterized IRA contribution,” a different transaction where a contribution is reclassified from one type of IRA to another.1Internal Revenue Service. 2025 Instructions for Forms 1099-R and 5498 Box 2a on a Code R form is zero, because a recharacterized contribution is treated as if it went to the second IRA type from the start.
Part of the confusion is historical. Before 2018, you could undo a Roth conversion by recharacterizing it back to a traditional IRA. The Tax Cuts and Jobs Act removed that option for conversions made in tax years after December 31, 2017.2Office of the Law Revision Counsel. 26 U.S. Code 408A – Roth IRAs Regular contributions can still be recharacterized between traditional and Roth IRAs, but a conversion is permanent. If your 1099-R shows Code R for what you know was a conversion, the form is wrong and needs to be corrected.
What to Do If the Code on Your Form Is Wrong
The most common wrong code on a real Roth conversion is Code 1 instead of Code 2 for someone under 59½. Filing your return with Code 1 in place can trigger an automatic IRS notice assessing the 10% early withdrawal penalty that shouldn’t apply to a conversion at all. Code R showing up on a conversion is the other error to watch for, since it tells the IRS the transaction was a recharacterization rather than a taxable conversion.
Contact the custodian and ask for a corrected 1099-R before you file. Fixing the form upfront is faster than answering an IRS notice later. Custodians can and do issue corrected 1099-Rs when they’ve miscoded a transaction, so ask specifically for a corrected form (marked “CORRECTED”) rather than just an explanation.
Where the Codes Land on Your Return
The gross distribution from Box 1 of the 1099-R goes on Line 4a of Form 1040 (the IRA distributions line). The taxable amount goes on Line 4b. If the whole conversion is taxable and you have no basis to account for, you can enter the taxable amount directly on Line 4b.3Internal Revenue Service. Instructions for Form 1040 – Lines 4a, 4b, and 4c The taxable portion is added to your ordinary income for the year the conversion happened and taxed at your marginal rate.
Because Codes 2, 7, and G all signal a conversion or direct rollover, the IRS does not assess the 10% early distribution penalty on the converted amount itself.2Office of the Law Revision Counsel. 26 U.S. Code 408A – Roth IRAs That’s the practical function of getting the Box 7 code right: it’s the flag that keeps a taxable conversion from being treated as a penalized early withdrawal.
One boundary worth noting. Box 2a on a traditional IRA conversion often shows the full Box 1 amount with Box 2b (“Taxable amount not determined”) checked, because the custodian may not know your contribution history across all your IRAs. If you’ve ever made non-deductible contributions to a traditional IRA, the taxable amount on your return will not match Box 2a, and you’ll compute it on Form 8606. The Box 7 code is still Code 2 or Code 7; the recalculation happens on the tax return, not on the 1099-R.