How to Report a Rollover IRA on Taxes: 1099-R, Form 1040, and 8606

To report a rollover IRA on your taxes, put the gross distribution from Box 1 of your Form 1099-R on Line 4a of Form 1040 (for IRA-to-IRA rollovers) or Line 5a (for rollovers out of a 401(k), 403(b), governmental 457(b), or pension), enter the taxable amount on Line 4b or 5b (zero if you rolled over the full amount), and check the rollover box on the new Line 4c or 5c. The rollover is generally tax-free, but it still has to appear on your return so the IRS can match it to the 1099-R the custodian sent them.

Do You Even Need to Report It?

Not every movement of retirement money produces a reporting obligation. A trustee-to-trustee transfer between two IRAs, where the money moves directly from one custodian to another and you never touch it, generally does not generate a Form 1099-R and does not go on your return.¹ If that’s what you did, you’re done.

Everything else gets reported. A direct rollover from a 401(k) or similar employer plan into an IRA generates a 1099-R even though the money went straight to the new custodian, because the plan administrator is required to issue one. A Roth conversion generates a 1099-R and is taxable. An indirect rollover, where a check was cut to you personally and you had 60 days to redeposit it, generates a 1099-R and requires the most care on your return, because the form on its own looks like a plain distribution.²

Reading the 1099-R

The 1099-R is the starting point. Three boxes drive what you enter on your return.

Box 1 (Gross Distribution) shows the total amount that left the account, including anything withheld for taxes. Box 2a (Taxable Amount) shows how much of that is taxable; for a direct rollover, this should be zero, and for an indirect rollover from an IRA the custodian may leave it blank and check “Taxable amount not determined,” leaving the calculation to you. Box 7 (Distribution Code) tells the IRS what kind of transaction the payer thinks occurred.¹

The Box 7 codes you’re likely to see on a rollover:

Code G: direct rollover from an employer plan to another eligible plan or IRA. Clean and nontaxable.
Code 1: early distribution, no known exception. May appear on an indirect rollover if you were under 59½, even if you completed the rollover on time. You have to show on your return that the money went back into a qualified account.
Code 7: normal distribution for someone 59½ or older. Same story as Code 1: if it was actually an indirect rollover, the payer may not know, so the reporting is on you.³

Code G with zero in Box 2a is easy. Code 1 or 7 on a rollover means you’ll be doing the work of demonstrating on Form 1040 that the distribution was properly rolled over.

Where the Numbers Go on Form 1040

The line you use depends on where the money came from.

IRA distributions go on Lines 4a and 4b. Put the Box 1 amount on Line 4a. If you rolled over the entire distribution, put zero on Line 4b. If you rolled over only part of it, subtract the rollover amount from the gross and put the remainder (the taxable part) on Line 4b. Then check box 1 on Line 4c to flag the transaction as a rollover.⁴

Distributions from employer plans (401(k), 403(b), governmental 457(b), pensions) go on Lines 5a and 5b, following the same pattern: gross on 5a, taxable remainder on 5b, and the rollover box checked on Line 5c.⁴

Starting with the 2025 return (the one most people file in 2026), the IRS added dedicated rollover checkboxes on Lines 4c and 5c. In prior years, the instructions told paper filers to write “Rollover” next to the line. If you’re filing on paper, check the box; don’t write next to the line. Tax software handles the placement automatically once you enter the 1099-R and answer its follow-up question about whether you rolled the money over.⁴

The logic across both line pairs is the same. Line “a” shows the IRS what left the old account, Line “b” shows how much of that is actually taxable, and the checkbox on Line “c” tells them the difference is explained by a rollover. When those three pieces line up with the 1099-R the custodian sent to the IRS, no tax is due on the rolled-over amount.

Indirect Rollovers, Withholding, and the 60-Day Clock

Indirect rollovers, where a check comes to you and you have 60 days to redeposit the funds into a qualified account, are where reporting mistakes turn expensive.⁵

Withholding rules depend on the account type. An employer plan is required to withhold 20% of an eligible rollover distribution paid to you for federal taxes.⁶ An IRA defaults to 10% withholding, but you can elect out entirely, which is why IRA-to-IRA indirect rollovers are simpler.²

The withholding trap on employer-plan distributions catches people every year. Say you take a $50,000 distribution from your 401(k). The plan withholds $10,000 and sends you a check for $40,000. To roll over the full $50,000 and owe no tax, you have to deposit $50,000 into the new IRA within 60 days, using $10,000 of your own money to cover the withheld portion. The $10,000 that was withheld comes back to you as part of your tax refund when you file, but you need the cash up front. If you only deposit the $40,000 you actually received, the $10,000 gap is taxable income and, if you’re under 59½, may also draw the 10% early withdrawal penalty.²

On your return, the reporting works the same as any other rollover: Line 5a shows the $50,000 gross, Line 5b shows the taxable amount (zero if you rolled the full $50,000, $10,000 if you only rolled the $40,000 you received), and Line 5c gets checked. The withholding shown in Box 4 of the 1099-R flows to Line 25b of Form 1040 as federal tax already paid.

The 60-day count runs from the date you receive the distribution, not the date on the check. Miss it and the entire amount is a taxable distribution. Keep the distribution notice, the check stub or deposit record, and the statement from the receiving account showing the deposit date. If the IRS questions the rollover later, those documents are your proof.⁷

One other constraint worth knowing before you take an indirect IRA rollover: federal law limits you to one IRA-to-IRA indirect rollover in any 12-month period, and the clock starts on the date you received the distribution. A second one inside that window is treated as a taxable distribution.⁸ Trustee-to-trustee transfers, rollovers from employer plans to IRAs, and Roth conversions don’t count against this limit.²

Roth Conversions Are Rollovers, But Taxable

Converting a traditional IRA to a Roth IRA is technically a rollover, but the converted amount is ordinary income in the year of the conversion because the money is moving from a pre-tax account to an after-tax one.

Report the full conversion on Form 1040 Line 4a, and put the taxable portion on Line 4b. You also file Form 8606, Part II, which calculates how much of the conversion is taxable based on any after-tax basis you have in your traditional IRAs.⁹

If you’ve ever made nondeductible contributions to a traditional IRA, only part of any conversion is taxable. The IRS applies a pro-rata rule that looks at the combined balance across all your traditional, SEP, and SIMPLE IRAs and works out the percentage that represents pre-tax versus after-tax money. You can’t pick which dollars you’re converting. Form 8606, Lines 16 through 18, walks through the math.⁹

When Else You Need Form 8606

Most rollovers between accounts of the same type (traditional IRA to traditional IRA, 401(k) to traditional IRA) do not require Form 8606. Two rollover-adjacent situations do.

A Roth conversion always requires Form 8606, Part II, as described above.⁹

Separately, if you took a distribution from a traditional IRA in which you have nondeductible basis and the funds were paid to you (rather than moved trustee-to-trustee), you need Form 8606, Part I to calculate the nontaxable portion of the distribution, even if you rolled the money into another traditional IRA.¹⁰

Form 8606 is easy to overlook because many people don’t realize they have basis in their IRAs. If you’ve ever contributed to a traditional IRA and didn’t deduct the contribution, you have basis. Losing track of it on Form 8606 can mean paying tax twice on the same dollars when you eventually draw the money out.

Keep the Paperwork

Hold on to the 1099-R, the deposit confirmation for the new account, and any statements showing when funds left the old account and arrived in the new one. If the IRS questions a rollover a year or two later, those records are the difference between a quick answer and a fight over back taxes and penalties. If you’re paper-filing and Box 4 of the 1099-R shows federal tax withheld, attach the form to your return so the IRS credits you for the withholding.

1
Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
2
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
3
Internal Revenue Service. Guide to Distribution Codes (Instructions for Forms 1099-R and 5498)
4
Internal Revenue Service. Instructions for Forms 1040 and 1040-SR
5
Internal Revenue Service. Retirement Plans FAQs Relating to Waivers of the 60-Day Rollover Requirement
6
eCFR. 26 CFR 31.3405(c)-1 – Withholding on Eligible Rollover Distributions
7
Internal Revenue Service. Do I Need to Report the Transfer or Rollover of an IRA or Retirement Plan on My Tax Return
8
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
9
Internal Revenue Service. Instructions for Form 8606 (2025)
10
Internal Revenue Service. Reporting IRA and Retirement Plan Transactions