IRA Rollovers
Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. The contribution to the second retirement plan is called a “ rollover contribution.” To learn more about rollover options for your IRA, please click on the below IRA type that you currently have. Learn more about the differences between a Traditional IRA and a Roth IRA, by click here.
Traditional IRA Rollover
Roth IRA Rollover
Note: An amount rolled over tax free from one retirement plan to another is generally includible in income when it is distributed from the second plan.
Traditional IRA Rollovers
You can transfer, tax free, assets (money or property) from other retirement programs (including Traditional IRAs) to a Traditional IRA. You can make the following kinds of transfers.
- Transfers from one trustee to another.
- Rollovers.
Trustee-to-Trustee Transfer
A transfer of funds in your Traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Because there is no distribution to you, the transfer is tax free. Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers.
Rollovers
Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. The contribution to the second retirement plan is called a “ rollover contribution.”
Treatment of IRA rollovers. You cannot deduct a rollover contribution, but you must report the rollover distribution on your tax return.
IRA Rollover notice. A written explanation of rollover treatment must be given to you by the plan (other than an IRA) making the distribution.
Kinds of rollovers to a Traditional IRA. You can roll over amounts from the following plans into a Traditional IRA:
- A Traditional IRA,
- An employer's qualified retirement plan for its employees,
- A deferred compensation plan of a state or local government (section 457 plan), or
- A tax-sheltered annuity plan (section 403 plan).
Roth IRA Rollovers
You may be able to convert amounts from either a Traditional, SEP, or SIMPLE IRA into a Roth IRA. You may be able to re-characterize contributions made to one IRA as having been made directly to a different IRA. You can roll amounts over from one Roth IRA to another Roth IRA.
Conversions
You can convert a Traditional IRA to a Roth IRA. The conversion is treated as a rollover, regardless of the conversion method used. However, the 1-year waiting period does not apply.
Conversion methods
You can convert amounts from a Traditional IRA to a Roth IRA in any of the following three ways.
- Rollover. You can receive a distribution from a Traditional IRA and roll it over (contribute it) to a Roth IRA within 60 days after the distribution.
- Trustee-to-trustee transfer. You can direct the trustee of the Traditional IRA to transfer an amount from the Traditional IRA to the trustee of the Roth IRA.
- Same trustee transfer. If the trustee of the Traditional IRA also maintains the Roth IRA, you can direct the trustee to transfer an amount from the Traditional IRA to the Roth IRA
Trustee-to-Trustee Transfer
A transfer of funds in your Traditional IRA from one trustee directly to another, either at your request or at the trustee's request, is not a rollover. Because there is no distribution to you, the transfer is tax free. Because it is not a rollover, it is not affected by the 1-year waiting period required between rollovers.
Same Trustee
Conversions made with the same trustee can be made by redesignating the Traditional IRA as a Roth IRA, rather than opening a new account or issuing a new contract.
