401k Rollover

An eligible 401k Rollover distribution from a participant's (or a deceased participant's spouse) employer's qualified pension, an IRA rollover from a profit-sharing or stock bonus plan, an IRA rollover from a qualified annuity plan, or tax-sheltered annuity plan (403b plan) or governmental 457 plans, can be rolled over, all or in part into a traditional IRA. This can be referred to as a traditional IRA rollover.

Generally, an eligible 401k rollover distribution is the taxable part of any distribution of all or part of the balance to a participant's credit in a qualified retirement plan except:

• A minimum required 401k rollover distribution.
• Hardship distributions from 401k retirement plans and certain 403b plans, or
• Any of a series of substantially equal periodic distributions paid at least once a year over: The participant's lifetime or life expectancy,

   

• The lifetimes or life expectancies of the participant and a beneficiary, or

   

• A period of 10 years or more.

Note that Starting in 2002 after-tax 401k contributions to qualified plans are eligible for an IRA rollover or a 401k Rollover or another qualified plan (if the other qualified plan will accept the IRA rollover or 401k Rollover and separately account for the after-tax contribution.

When is a transfer not an IRA rollover or a 401k Rollover?

A transfer of assets in a traditional IRA from one trustee directly to another trustee, at the owner's request or at the trustee's request, is not an IRA rollover or a 401k Rollover, even if a 401k is involved.

Because there is no distribution paid to the IRA owner, the transfer is not a taxable event. Form 1099-R is not issued.

Unlike the once-per-year limit on IRA rollover from the same IRA, there is no limit on the number of trustee-to-trustee transfers that can be made in any year.