Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Non Governmental 457(b) rolled into another non governmental 457(B)

MDetlet
Level 1

I have a situation where an individual received a distribution from a non governmental 457(B) in December 2020 and then rolled it into a new employers non governmental 457(B) plan within the 60 day limit but in 2021.  The original 457(B) plan issued a W-2 to the taxpayer for 2020.  it is my understanding that the taxpayer can roll this over from one non governmental plan to another without generating a tax bill,  but how do i reflect this on the 1040 

Labels (1)
0 Cheers
9 Replies 9
qbteachmt
Level 15

Here:

https://www.irs.gov/help/ita/do-i-need-to-report-the-transfer-or-rollover-of-an-ira-or-retirement-pl...

 

*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers
MDetlet
Level 1

Hi Thank you for the reply, but the issue here is that the original distribution was reported on a W-2 and 

not a 1099-R

0 Cheers
biancas80
Level 1

I have the same situation. Did you ever get a response? phone support was not helpful. 

0 Cheers
MDetlet
Level 1

Hi 

unfortunately i did not get a reply on this

0 Cheers
qbteachmt
Level 15

My understanding of this sort of plan is they are holding an unfunded plan account; when you leave, that is a distribution, and it can't be rolled into another plan account that also is supposed to be unfunded. And the rolled over part would be held in a separate account from the new employer's account for this individual, since this came over as funds. That's why they are called Top Hat plans.

Do you have an IRS reference for this statement: "it is my understanding that the taxpayer can roll this over from one non governmental plan to another without generating a tax bill,"

I would enter the W2 as shown; which should show this was taxed already.

*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers
biancas80
Level 1

I ended up reporting it with no rollover. I did find an IRS table that says it cannot be rolled over from a non governmental plan. See link, third line from the bottom. This is in contradiction from several other sources online that are not IRS. It is also the ONLY IRS source I could fine that addresses it. Very obscure stuff. 

 

https://www.irs.gov/retirement-plans/comparison-of-tax-exempt-457b-plans-and-governmental-457b-plans

 

 

 

 

MDetlet
Level 1

457(e)(10)Transfers between plans

A participant shall not be required to include in gross income any portion of the entire amount payable to such participant solely by reason of the transfer of such portion from 1 eligible deferred compensation plan to another eligible deferred compensation plan.

0 Cheers
qbteachmt
Level 15

"Rollovers to other eligible retirement plans (401(k), 403(b), governmental 457(b), IRAs)"

No, for "Tax-Exempt 457(b) plan: Tax-exempt employer that isn’t a state or local government (or political subdivision, instrumentality, agency)"

Yes, for : "Governmental 457(b) plan: State or local government or political subdivision or instrumentality or agency"

 

https://www.irs.gov/retirement-plans/comparison-of-tax-exempt-457b-plans-and-governmental-457b-plans

 

As already explained by Bianca.

*******************************
"Level Up" is a gaming function, not a real life function.
sjrcpa
Level 15

A nongovernmnetal 457(b) Plan is not an eligible retirement plan for purposes of eligible rollover distributions.


ex-AllStar