How to Report an Indirect Rollover on Your Tax Return

To report an indirect rollover on your tax return, enter the gross amount from Box 1 of your Form 1099-R on Line 4a (for IRA distributions) or Line 5a (for 401(k) and other employer plan distributions) of Form 1040, then enter zero on Line 4b or 5b if you rolled the whole amount back into a retirement account within 60 days, and check the rollover box on Line 4c or 5c.¹ That combination tells the IRS you received a distribution but returned it to a qualified account, so none of it is taxable. Skip the checkbox or leave Line 4a/5a blank, and the IRS matching system will treat the full distribution as unreported income.²

Documents You’ll Need

Pull three things together before you start.

The Form 1099-R from the institution that paid the distribution is your primary source.³ Box 1 shows the gross distribution. Box 2a shows the taxable amount as the payer sees it, but that number is not final; your tax return is where the actual taxable amount gets established. Box 2b often has “Taxable amount not determined” checked, which is normal for IRA distributions.⁴ Box 4 shows any federal tax withheld. Box 7 carries the distribution code.

The deposit confirmation from the receiving institution proves the rollover happened and shows the date. Keep it with your tax records.

Form 5498 comes later. Receiving custodians have until the end of May to send it, so you likely won’t have it in hand when you file, but the IRS uses it to cross-check your return. Box 2 shows rollover contributions.⁵

Why Your 1099-R Doesn’t Say “Rollover”

The distribution code in Box 7 reflects what the payer knew at the moment the check was cut, not what you did with the money afterward. An indirect rollover shows up as a regular distribution because that’s what it was when it left the account.

Code G means a direct rollover, where funds moved plan-to-plan without ever touching your hands.⁴ You will not see Code G on an indirect rollover. Instead, expect Code 1 if you were under 59½ when the distribution was paid, or Code 7 if you were 59½ or older. Both codes signal a potentially taxable distribution. Your return is where you show the money went back into a qualified account.

Reporting an IRA Indirect Rollover

Distributions from traditional, Roth, SEP, and SIMPLE IRAs go on the IRA lines of Form 1040, not the pension lines.¹

Line 4a: enter the gross distribution from Box 1 of your 1099-R.
Line 4b: enter zero if you rolled the whole amount back within 60 days. If you rolled over only part, enter the portion you kept.
Line 4c: check the rollover box.⁶

Line 4a acknowledges receipt. The zero on Line 4b plus the rollover flag on 4c explains why no tax is due on it.

Reporting a 401(k) or Other Employer Plan Rollover

Distributions from 401(k)s, 403(b)s, governmental 457(b)s, and other qualified plans go on the pension and annuity lines.¹

Line 5a: enter the gross distribution from Box 1.
Line 5b: subtract any after-tax contributions (usually Box 5 of the 1099-R) from the gross, then subtract the amount you rolled over. What remains is taxable. If the result is zero, enter zero.
Line 5c: check box 1 to indicate a rollover.⁷

Handling the 20% That Was Withheld

Employer plans must withhold 20% for federal income tax on any eligible rollover distribution paid directly to you. There’s no opt-out.⁸ Take a $50,000 distribution from a 401(k), and you receive $40,000; the other $10,000 goes to the IRS.

To roll over the full $50,000 and owe zero tax, you have to deposit $50,000 into the receiving account within 60 days. That means finding $10,000 from savings or other sources to replace the withheld amount.² Deposit only the $40,000 you received, and the missing $10,000 is treated as a taxable distribution, with a 10% early withdrawal penalty on top if you’re under 59½.

If you did replace the withheld amount, report the tax withheld from Box 4 of your 1099-R on Line 25b of Form 1040. That withholding is now a prepayment on income that turned out not to be taxable, so it either offsets other tax you owe or comes back as a refund.

IRA distributions work differently. The default withholding on an IRA distribution is 10%, and you can elect out entirely or choose a different rate.² Opting out before the distribution is issued is the cleanest way to avoid the replacement problem.

Reporting a Partial Rollover

If you rolled over some of the distribution and kept the rest, the kept portion is taxable. Say you received $10,000 and deposited $8,000 into a new IRA within 60 days. Line 4a shows $10,000, and Line 4b shows $2,000.⁹ That $2,000 is taxed as ordinary income, and if you’re under 59½, the 10% early withdrawal penalty applies to it.¹⁰

One wrinkle if your traditional IRA holds both deductible and nondeductible contributions: you can’t roll over only the pre-tax portion. The IRS applies a pro-rata formula across all your traditional IRAs, calculated on Form 8606, Part I, using the ratio of after-tax basis to total year-end IRA value plus distributions.¹¹

Reporting a Roth IRA Indirect Rollover

A Roth-to-Roth IRA rollover follows the same Form 1040 pattern as a traditional IRA rollover. Gross distribution on Line 4a, zero on Line 4b (assuming a full rollover), rollover box checked on 4c.

You do not need to complete Form 8606, Part III, for a fully rolled-over Roth distribution. The Form 8606 instructions say to exclude rolled-over amounts from Line 19.¹² Part III becomes relevant only for a Roth distribution that isn’t fully rolled over, where you need to calculate the taxable portion. If you’re rolling a designated Roth account from an employer plan (a Roth 401(k), for example) into a Roth IRA, follow the Form 8606 instructions to track the amount, because the basis carries over differently than for regular Roth contributions.¹³

Reporting a Late Rollover

If you missed the 60-day window and completed the rollover using a self-certification under Revenue Procedure 2020-46, report it on your return the same way as a timely rollover: full distribution on Line 4a or 5a, zero (or the non-rolled amount) on 4b or 5b, and the rollover box checked.¹⁴

The receiving institution reports a self-certified late rollover in Box 13a of Form 5498, with code “SC” in Box 13c, rather than in the standard rollover Box 2.⁵ Keep a copy of the written certification with your tax records. The IRS can review it on audit, and if the waiver conditions weren’t actually met, the distribution becomes taxable retroactively.¹⁵

The One-Per-Year Limit

One boundary worth knowing before you rely on the reporting above: you can only do one indirect IRA-to-IRA rollover in any 12-month period, and the IRS aggregates all your IRAs (traditional, Roth, SEP, SIMPLE) as a single account for the count.² The 12 months run from the date you received the distribution, not the date you completed the rollover. If a second indirect rollover falls inside that window, it can’t be reported as tax-free no matter what you write on Line 4b. The IRS treats it as a taxable distribution, and because the money landed in an IRA, it may also count as an excess contribution subject to a 6% excise tax every year it stays there.

Trustee-to-trustee transfers, plan-to-IRA rollovers, and Roth conversions don’t count against the limit. If you need to move IRA money more than once in a year, a trustee-to-trustee transfer avoids the trap entirely.

1
Internal Revenue Service. 2025 Instructions for Form 1040
2
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
3
Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
4
Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
5
Internal Revenue Service. Form 5498, IRA Contribution Information
6
Internal Revenue Service. Publication 590-A (2025), Contributions to Individual Retirement Arrangements (IRAs)
7
Internal Revenue Service. Instructions for Form 1040 (2025)
8
eCFR. 26 CFR 31.3405(c)-1 – Withholding on Eligible Rollover Distributions; Questions and Answers
9
Internal Revenue Service. Retirement Plans FAQs Regarding IRAs Distributions (Withdrawals)
10
Internal Revenue Service. Topic No. 557, Additional Tax on Early Distributions From Traditional and Roth IRAs
11
Internal Revenue Service. Publication 590-B (2025), Distributions From Individual Retirement Arrangements (IRAs)
12
Internal Revenue Service. Instructions for Form 8606 (2025)
13
Internal Revenue Service. Retirement Plans FAQs on Designated Roth Accounts
14
Internal Revenue Service. Revenue Procedure 2020-46
15
Internal Revenue Service. Retirement Plans FAQs Relating to Waivers of the 60-Day Rollover Requirement