Even if such checks are presented to you for conveyance to the IRA custodian, they still constitute a direct rollover. Rollovers from a 401(k) should generally be done directly, with each distribution made payable only to the particular IRA that is intended to receive the rollover. The rollover of each is a separate rollover. The distribution from the traditional account in the 401(k) and the distribution from the Roth account in the 401(k) are two separate distributions. Distributions from a 401(k) are not subject to the one-rollover-per-year limitation, so both of your distributions from the 401(k) rollovers are disregarded with respect to this limitation. It only applies to IRA-to-IRA rollovers (other than Roth conversions).
If you have possession of the funds, it is in effect a 60 day interest free loan, and this is why it was limited in 2015, however, they still needed to allow employees to switch PLANS when they move jobs, so rollovers involving PLANS are not limited.īeginning after January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own.
The ONCE per year rule does NOT apply to qualified 401(k) plans. It might say FBO (for the benefit of) and your name, but payable to your other bank. The ONCE per year rule does NOT apply if the check you receive is NOT made out in your name. The ONCE per year rule does NOT apply if the money goes directly from one account to another. Leave yourself leeway in case something goes wrong. I will not attempt to explain the 42 ways you can screw it up. Turbo tax will ask what you did with the money. (The withholding will be refunded next year, but you may have to borrow the money short term! Be prepared to 'make up' the difference when you make the deposit. I have 40 days remaining to decide!Ģ0% withholding is a requirement when you take the distribution. If you are an expert and disagree with my interpretation, let me know quick. This means you can do several 60 day rollovers. My interpretation of this publication found on IRS.gov, is not widely understood, and I have found no experts online who point this out: The once per year limit does NOT apply to 401(k) plans, rolling in or out. (and it's ''probably'' considered as one rollover anyway, with the two checks being withdrawn on the same day). I intended to do a 60 day rollover because I no longer need the funds right now.īut two checks, and two deposits, is this two rollovers? Maybe, but after closer inspection of the ONCE PER YEAR rule I see it does not apply. I took a distribution from my 401(k) and got two checks because some of it is ROTH.
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