IRA FAQs - Rollovers and Roth Conversions
Can I roll over my IRA into my retirement plan at work?
You can roll over your IRA into a qualified retirement plan (for example, a 401(k) plan), assuming the retirement plan has language allowing it to accept this type of rollover. Roth IRAs can only be rolled over to another Roth IRA.
Can I roll over my workplace retirement plan account into an IRA?
Almost any type of plan distribution can be rolled over into an IRA except:
- Required minimum distributions,
- Loans treated as a distribution,
- Hardship distributions,
- Distributions of excess contributions and related earnings,
- A distribution that is one of a series of substantially equal payments,
- Withdrawals electing out of automatic contribution arrangements,
- Distributions to pay for accident, health or life insurance,
- Dividends on employer securities, or
- S corporation allocations treated as deemed distributions.
For details, see rollovers of retirement plan distributions. Distributions from a designated Roth account can only be rolled over to another designated Roth account or to a Roth IRA.
How long do I have to roll over a distribution from a retirement plan to an IRA?
You must complete the rollover by the 60th day following the day on which you receive the distribution. You may be eligible for an automatic waiver of the 60-day rollover requirement if a financial institution caused the error and other conditions are met. See Publication 590, Individual Retirement Arrangements (IRAs) and Retirement Plans FAQs relating to Waivers of the 60-Day Rollover Requirement.
Can I avoid the additional tax on early withdrawals if I roll over a 401(k) distribution to an IRA and then withdraw that money to use as a down payment on a house?
You can avoid the 10% additional tax on early withdrawals if:
- You receive a distribution from a 401(k) plan that is eligible to be rolled over into an IRA
- You meet all of the qualifications for an IRA distribution for a first-time homebuyer
See Tax on Early Distributions for more information.
How do I convert my traditional IRA to a Roth IRA?
You can convert your traditional IRA to a Roth IRA by:
- Rollover – You receive a distribution from a traditional IRA and contribute it to a Roth IRA within 60 days after the distribution (the distribution check is payable to you);
- Trustee-to-trustee transfer – You tell the financial institution holding your traditional IRA assets to transfer an amount directly to the trustee of your Roth IRA at a different financial institution (the distributing trustee may achieve this by issuing you a check payable to the new trustee);
- Same trustee transfer – If your traditional and Roth IRAs are maintained at the same financial institution, you can tell the trustee to transfer an amount from your traditional IRA to your Roth IRA.
A conversion to a Roth IRA results in taxation of any untaxed amounts in the traditional IRA. The conversion is reported on Form 8606, Nondeductible IRAs. See Publication 590, Individual Retirement Arrangements (IRAs), for more information.
How do I report my 2010 Roth rollovers and conversions on my 2012 tax return?
You are required to report half of the taxable amount of your 2010 rollovers and conversions on your 2012 income tax return unless you:
- elected to include the taxable amount in income for 2010,
- recharacterized your 2010 Roth rollover or conversion, or
- received a distribution in 2010 or 2011 of any of the taxable amount (in which case, you may have to report an amount other than half on your 2012 tax return).
For details on how to report 2010 rollovers on a 2012 return, see 2012 Reporting for 2010 Roth Rollovers and Conversions.