60-Day Rollover Rule & SIMPLE IRA
Trying to confirm if one can do an indirect rollover and use it as a “short-term loan” from a SIMPLE IRA, then deposit funds back into the same SIMPLE IRA within 60 days?
If possible, are there any nuances one needs to be aware of/consider?
I have read some conflicting information and would like to confirm with the experts!
Thank you!
Permalink Submitted by Alan - IRA critic on Tue, 2022-05-24 18:57
If at least 2 years has passed from the date of the first SIMPLE IRA contribution, a distribution from the SIMPLE can be rolled over or back to the SIMPLE, but only if the person has a rollover available according to the one rollover limit in a 12 month period. The IRS wants to discourage using IRA money for short term loans, but people who tend to take these loans often do it enough to violate the rule. If the person has not rolled over a prior distribution taken in the last 12 months, they have a rollover available, but then would be locked out of doing another one in the next 12 months. So there are multiple time based restrictions in play here.