IS 403B CONSIDERED TRANSFER TO IRA OR DIRECT ROLLOVER?
ON THE COMPANIES FORM, IT STATE IS THIS A TRANSFER OR DIRECT ROLLOVER?
IF WE PUT DIRECT ROLLOVER TO THE CLIENTS IRA ACCOUNT (GOES FROM 403B COMP DIRECTLY TO HER IRA COMPANY), DOES THAT COUNT AS A ONE TIME ROLLOVER RULE IN 12MTHS?
REASON FOR ASKING IS THAT SHE HAS 4 403B ACCOUNTS AND I DONT WANT TO HAVE A TAX PROBLEM FOR THE CLIENT.
THANK YOU
DOUG
Permalink Submitted by Dan Zaehring on Wed, 2022-05-04 19:35
Unfortunately, different terms are often used interchangeably. Some administrators will use the term “transfer” to indicate a direct trustee to trustee transaction. Others will use the term “direct” rollover to indicate the same type of transaction — as opposed to a regular rollover which has the12 month restriction. Was the company offering an either/or choice or just using both terms to be clear?
Permalink Submitted by Douglas Bauerband on Wed, 2022-05-04 20:46
The company was offering an either/or (transfer or direct rollover) box to be checked?But if I check the transfer they probably would not accept it due to a 403b is a rollover to an IRA, correct?But if they do the rollover, does that qualify for the one time rule and if so, they she can’t rollover her other four 403b’s, correct?Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2022-05-04 20:57
The one rollover limitation only applies to IRA to IRA 60 day rollovers. A direct rollover from a 403b plan is not subject to this limit for two reasons. First, it is not an IRA to IRA rollover, and second it is not a 60 day rollover, it is a direct rollover. Note that some payments from one 403b to another 403b are treated as non reportable transfers, such as for an IRA to IRA direct transfer.