When you move money from one retirement account to another, it’s natural to wonder whether the transaction will be taxable. The good news: most direct rollovers are not taxable, but you will still receive certain IRS forms that document the movement of funds.
How to Know Whether Your Rollover Is Taxable
Any time money leaves a retirement account, the institution is required to issue an IRS Form 1099‑R.
To confirm that your rollover was non‑taxable, look for:
Code “G” in Box 7 of Form 1099‑R
This code indicates a direct rollover from one retirement plan to another (for example, from a 401(k) to an IRA).
A Code G means the transaction is not taxable, as long as the funds went directly into another eligible retirement account and not into a Roth account.
Why You’ll Also Receive Form 5498
After the rollover lands in your IRA, the receiving institution will issue IRS Form 5498, which reports the rollover contribution.
A few helpful notes:
- Form 5498 is informational only — you do not file it with your tax return.
- It is typically mailed in May, so it can include any IRA contributions made before the tax filing deadline that apply to the prior year.
- The institution sends a copy directly to the IRS.
Want to Learn More?
For additional details, you can review the IRS instructions for Form 1099‑R:
https://www.irs.gov/pub/irs-pdf/i1099r.pdf
Important Reminder
This information is provided for educational purposes only and should not be considered tax advice. For guidance on your specific tax situation, please consult a qualified tax professional.
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