72T drips

Successfully dripping annually funds out of IRA. Can the net funds received be placed/converted to Roth?



No. A SEPP plan distribution cannot be rolled over to any type of plan.

That said, you could convert from the SEPP IRA account to a Roth IRA an additional amount to your annual SEPP distribution if you wanted to, but both the required SEPP distribution and the conversion would be taxable. This would also be likely to attract IRS attention to the conversion because such a conversion would produce a distribution larger than the expected SEPP distribution.

The intended purpose of a SEPP penalty exception is to provide a means of receiving an IRA distribution penalty free prior to age 59.5 because you needed the money. Since you apparently do not need the full SEPP distribution and wanted to reduce the payout, you might consider the one time switch to RMD method if you are not already using the RMD method.

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