I took a distribution from a 401(k) from a company I no longer work for, check is made out to a bank and will be deposited directly to another qualifying retirement account (Individual Retirement Trust).
Is there anything in there that has to be reported to the IRS, even though I owe no taxes as a result? Since the check was made out directly to the bank I did not have constructive receipt of the funds.
You should still receive a 1099R for the rollover distribution. The total amount of the rollover will be stated in Box 1 of the 1099R, but Box 2, which is “Taxable Amount” should be 0. Also the Distribution Code on the 1099R should be a “G”. This indicates a Direct Rollover. If it is not a code of “G” you should check with the financial institution that generated the 1099R as this goes to the IRS, and if a code such as a “1” or a “7” are in that distribution code box the IRS will think it is taxable income.
Your filing requirements on your 1040 are to state the total amount of the distribution in Box 15A on the 1st page of the 1040, however box 15B (which is the box for the taxable portion) should be 0.
Sorry for late reply - been a bit busy with tax season and all.
I assume you are talking about Box 2 of the 1099R showing “0”? This will only occur if it is a direct rollover (there are other instances where it can be zero but are not related to this discussion). Which means that the funds must be directly transferred from your 401(k) or IRA (traditional, SEP, SARSEP, SIMPLE, etc) into another 401(k), or IRA. If you ever receive the funds personally (even by just having the check made out to you and then directly depositing that check into another retirement account) the disbursment of funds will be considered taxable.
If this happens, you can appeal to the trustee of the original retirement plan to cancel the original check and to instead do the direct rollover so that the 1099R will show the correct distribution code.