60 day rollover payback
I have a client who will take money from their Simple IRA, and plans to pay it back before 60 days. Can they pay it back in pieces instead of a lump sum and still comply with IRS regulations.
I have a client who will take money from their Simple IRA, and plans to pay it back before 60 days. Can they pay it back in pieces instead of a lump sum and still comply with IRS regulations.
Permalink Submitted by Alan Spross on Wed, 2012-05-09 20:51
Yes, as long as the total amount is back in the SIMPLE IRA within 60 days. If not, the distribution is taxable and if it is within the first two years of the SIMPLE IRA, the penalty would be 25%.
A rollover is counted by the number of distributions, not by the the number of rollover contributions needed to replace the funds.
Permalink Submitted by Julie Brangenberg on Wed, 2012-05-09 21:07
What if they don’t get it all back in within 60 days? Are the taxes and penalties (10% early) on based on the unfunded amount?
Permalink Submitted by Alan Spross on Wed, 2012-05-09 22:32
Yes, just the amount that is not rolled back.