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Eligible Qualified Plans Or Traditional IRAs
The following plans can be rolled over tax free:
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Qualified business retirement plans, e.g., profit sharing and 401(k)s; |
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IRAs (Individual retirement arrangements) which can include cash, stock and property; |
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Qualified annuity plans for employees; |
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State and local government compensation plans; |
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Tax sheltered annuities; |
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Qualified distribution under divorce or similar proceedings; |
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And, generally, an inherited traditional IRA which is called a Beneficiary IRA. |
Rollover distributions are not eligible as rollover contributions if: they are part of a required minimum distribution, a hardship distribution, a series of equal periodic distributions paid once a year, corrective distributions, or a loan treated as a distribution.
Contribution Guidelines
There are time limits for making a rollover contribution, which is generally 60 days after you receive the distribution. If you take a distribution and it is not rolled over in time, these amounts are taxable in the year of the distribution and may include a 10% additional tax. A 60-day waiver is automatic only if the following apply:
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The financial institution receives the funds within the 60-day period. |
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The funds were not deposited in time due to an error of the financial institution. |
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The funds are frozen due to bankruptcy or potential insolvency of the institution |
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There are other waivers, but you must apply to the IRA for a letter ruling. |
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A transfer from a SIMPLE IRA to another SIMPLE IRA |
There is also a waiting period between rollovers. If you make a rollover from an IRA, you cannot make another rollover from the same IRA within one year.
Distribution Requirements
A rollover contribution is subject to the distribution requirements of the specific IRA where the assets were placed.
For more information, consult the Department of Treasury, Internal Revenue Service Publication 590 Individual Retirement Arrangements IRAs listed under Publications. |
