IRA Rollover Rules

This section of Rollover IRA website covers IRA rollover rules. IRA rollover rules are very important to know before you IRA rollover or do a trustee to trustee transfer of 401, 403b, or other IRA plan accounts.

What is the IRA rollover rules on time limit for making an IRA rollover contribution?

Generally an IRA rollover contribution must be made by the 60th day after the day of receipt of the IRA rollover distribution from a traditional IRA.

If the 60th day after the day of receipt of the IRA rollover distribution falls on a non-business day, the IRA rollover contribution must be received no later than the prior business day.

The 60 day period begins with the day of actual physical receipt of the IRA rollover distribution by the IRA owner or plan participant. It does not include mailing time.

For IRA rollover distributions beginning in 2002 the IRS may waive the 60 day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty, disaster, or other event beyond the IRA owner's reasonable control.

What happens if the IRA rollover is completed after the 60 day period? What are the IRA rollover penalties?

IRA rollover amounts not rolled over within the 60 day period do not qualify for tax-free IRA rollover treatment. It must be treated as a taxable IRA rollover distribution from the IRA. The amount is taxable in the year the IRA rollover amount is distributed, even if the 60 day period expires in the next year.

IRA rollover penalties

There may also be a 10% tax on early IRA rollover distributions. Any IRA rollover contribution received by an IRA made more than 60 days after the IRA rollover distribution (a " failed IRA rollover ") is treated as a regular IRA rollover contribution (or an excess IRA rollover contribution if in excess of the limitations on regular IRA rollover contributions for that year) and is not an IRA rollover contribution.

How long must an IRA owner wait between rollovers from one IRA to another?

If someone makes an IRA rollover of any part of an IRA rollover distribution from a traditional IRA, that person cannot, within a 1-year period beginning from the date of the IRA rollover distribution, make a tax free IRA rollover of any later IRA rollover distribution from that same IRA or from the IRA into which they made the tax free IRA rollover.

The 1 year period begins on the date of receipt of the IRA rollover distribution, not on the date it is rolled over into an IRA.

Note: There is no waiting period between IRA rollovers from an employer 's qualified retirement plan to an IRA. A participant can make more than one IRA rollover of employer plan distributions within a year.

The once-a-year limit on IRA to IRA rollovers does not apply to these IRA rollover distributions. Thus, you can roll over an IRA rollover distribution from a qualified plan to IRA 1 and then roll from IRA 1 to IRA 2 without waiting.