Contributions to IRA during 72(t) Distributions
Hello Everyone –
Quick question for you….
If someone is in the midst of taking 72(t) distributions from their IRA and inadvertently directly rolled $4,000 into that same IRA from a former employer’s 401(k)…can this transaction be reversed? If so, what is the time frame they have to do it? If not, what are the penalties, consequences, etc?
The rollover occurred in Feb 2015 and did not effect the amount of the 72(t) distributions.
Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2015-08-21 18:37
Unfortunately, that rollover instantly busted the 72t plan and cannot be reversed, and now retroactive penalty and interest will be owed on all the penalty free distributions taken under the plan. The 5498 for this IRA account number showing a rollover contribution should trigger IRS action.