Reply To: IRS broadens rollover relief for 2020 RMDs

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#8332
TrustYourself
Participant

Question on how to report the 401k RMD distribution rolled back to same 401k? In notice n-50-51, FAQ #8 and #9 (on pages 8 and 9) make it clear that an RMD which has been taken, can be rolled back into the 401k. Furthermore that the lack of tax withholding is not an obstacle. As the trustee of my solo 401k I would normally prepare a 1099-R to report the RMD distribution, and would also report the distribution on form 5500-EZ. I would be unsure on how to report the rollover back into the account. The 1099-R reporting could be messy – in that the standard distribution codes for the 1099-R don’t have an option for rollover eligible cash distribution with no withholding. Would it be OK to report nothing at all on a 1099-R and on the 5500-EZ? I did return the funds is less than 60 days, with the funds coming out of my 401k bank account and being returned to my 401k brokerage account. My plan documents do allow for rollovers, and do allow the Trustee (me) to personally hold funds when moving from one investment vehicle to another. So maybe I can reclassify what had been intended as an RMD distribution as simply a within-plan reallocation of investments with no reporting requirements!
Insights would be appreciated. I will need to figure this out before deciding whether to issue a 1099-R early next year.