3 year rollovers

Submitted by Sten Lindquist on Mon, 2023-08-21 15:00

The new penalty exceptions under SECURE 2.0 allow for a rollover within 3 years. Do rollovers under this provision count against the one per 12 month rule for IRA to IRA rollovers?



Submitted by Alan - IRA critic on Mon, 2023-08-21 15:52

  • No, because the recontribution (eg. of a qualified birth or adoption distribution) made within 3 years is treated as a direct transfer. That probably means that a 5498 will not be issued reporting a rollover. See below from Sec 72(t)(H)(v)the tax code.
  • “(IV)Treatment of repayments for distributions from IRAsIf a contribution is made under subclause (I) with respect to a qualified birth or adoption distribution from an individual retirement plan, then, to the extent of the amount of the contribution, such distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.”

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