A Mega Backdoor Roth conversion via the in-service-distribution path generates two information returns that, at first glance, look like they double up. They do not — one reports money leaving the 401(k), the other reports the same money arriving in the Roth IRA.
Form 1099-R — money leaving the plan
Your 401(k) recordkeeper issues a Form 1099-R for the distribution. Read three boxes:
- Box 1 — Gross distribution: the total moved (after-tax basis + any earnings).
- Box 2a — Taxable amount: the earnings portion. After-tax basis is not taxable; only the growth that accrued before conversion is.
- Box 5 — Employee contributions / designated Roth / after-tax: the after-tax basis, which is the part that is not taxed.
The distribution code in Box 7 tells the IRS what kind of movement this was. In-plan rollovers commonly use code G; a distribution rolled to a Roth IRA is coded according to the transaction. Your custodian, not this site, determines the correct code.
Form 5498 — money arriving in the Roth IRA
Your Roth IRA custodian files Form 5498 reporting the rollover contribution into the Roth IRA. You typically receive it later in the year (custodians have until May), so it is informational and confirms the rollover-in. You do not enter it the way you enter a 1099-R; it documents that the money landed where it should.
Why they do not double-count
The 1099-R is the taxable event on your return; the 5498 is a confirmation. The same dollars appear on both because they made one trip: out of the 401(k) (1099-R) and into the Roth IRA (5498). Your return reflects the 1099-R's taxable amount (the earnings), and Form 8606 documents the after-tax basis so it stays tax-free. Match Box 1 of the 1099-R to the rollover amount on the 5498 and confirm the taxable amount equals only the earnings.
Coding and amounts are specific to your transaction and filing year — confirm the entries with a CPA or Enrolled Agent.