CRD retirement account distribution
A client is looking to take a CRD from his 401k this year. he was furloughed but not sure he will need the funds? if he takes a distribution from both the Roth bucket and the traditional bucket and ends up not needing the money will he be able to roll those monies into a Roth IRA and a traditional IRA? or is that not allowed based on the one rollover per 12 months rule?
Permalink Submitted by Alan - IRA critic on Fri, 2020-06-19 23:17
The one rollover limit will not apply to CRD repayments, and client will also have 3 years from the CRD distribution date to make any repayment. The TIRA distribution can be repaid in any combination into eligible retirement plans including a Roth IRA, but the Roth distribution can only be rolled back into a Roth IRA. These options will include filing IRS Form 8915, new edition 8915 E yet to be released. Finally, note that his 401k plan may or may not offer CRDs.