Roth IRA Rollover Rules

A rollover moves eligible retirement money into another retirement account. How the money moves and whether it is taxable are separate questions. A direct 401(k)-to-Roth IRA rollover can create income tax. Moving money directly between your own Roth IRAs generally does not. The 60-day deadline and IRA one-per-year restriction depend on the transaction, not just the word “rollover.”

A transfer, a direct rollover, and a 60-day rollover are different routes

The account names matter. Here, a Traditional IRA means a non-Roth IRA; a Roth conversion means moving non-Roth retirement money into a Roth. A custodian is the financial institution holding your IRA.

These are different classifications, not competing promises. For example, the same move can be both direct and taxable. Eligibility, required distributions and the receiving account’s rules still apply. IRS rollover overview.

A check in your mailbox is not automatically an indirect rollover

Look at who can cash the check, not just who opens the envelope. Under current direct-rollover rules, an employer plan can give you a check payable only to the receiving trustee or custodian for your benefit and have you deliver it.

• Payable to the receiving institution for your benefit: can be a direct rollover, even if you forward the check yourself. Confirm the exact payee instructions with both institutions.
• Payable to you personally: generally a distribution to you. A subsequent eligible rollover normally uses the 60-day route, with the applicable withholding rules.

That distinction is in existing Treasury regulations; it was not created by the August 2026 proposal. The proposal discusses possible future changes to participant-delivered checks, but those ideas are not a current ban. Notice 2026-49, sections II and IV.

Which moves use your one IRA rollover in 12 months?

The rule generally limits tax-free IRA-to-IRA rollovers through money paid to you to one in a rolling 12-month period. It combines your Traditional, Roth, SEP and SIMPLE IRAs; opening another IRA does not create another allowance. Returning money to the same IRA can count, too.

The period starts when you receive the distribution that you successfully roll over—not when you redeposit it and not on January 1. Keep the exact receipt dates when checking a second transaction.

The IRS expressly excludes:

• Trustee-to-trustee IRA transfers.
• Traditional-to-Roth IRA conversions.
• Plan-to-IRA, IRA-to-plan and plan-to-plan rollovers.

Example: You receive a Traditional IRA distribution in March and validly roll it into another Traditional IRA. Receiving another IRA distribution in October and trying another IRA-to-IRA rollover normally fails this limit. Two eligible 401(k)-to-IRA rollovers or two Traditional-to-Roth conversions are not barred by this particular rule.

A failed Roth-to-Roth rollover is not harmless just because the original withdrawal might be tax-free. An ineligible redeposit can create an excess contribution and a recurring 6% excise tax unless corrected. Income tax on the withdrawal itself depends on the account’s distribution rules. Publication 590-A, Rollovers.

How do you count the 60 days?

For the ordinary participant-paid route, day 1 is the day after receipt. Count calendar days, including weekends and holidays. Do not assume a bank closure gives extra time. Specific relief and special rules, including certain plan-loan offsets, need separate checking.

Late-rollover relief can include an automatic waiver, applicable disaster postponement, self-certification for a listed reason, or an IRS ruling. Self-certification is not an IRS waiver. Under Revenue Procedure 2020-46, the qualifying reason must have caused the delay, the IRS must not have previously denied a waiver for that distribution, and the contribution must be made as soon as practicable after the obstacle ends. Completing it within 30 days of that point meets that timing test; it is not an absolute outer limit.

The receiving institution is not required to accept a late contribution, and relief from the deadline does not cure other rollover failures, such as the IRA one-per-year restriction. See our 60-day rollover guide and the self-certification procedure. Ruling fees and procedures can change; this guide does not quote a current fee.

Withholding is a tax prepayment, not a second tax bill

For an eligible employer-plan rollover distribution paid to you, 20% of the taxable portion is generally withheld for federal income tax. The mandatory rule does not apply to a direct rollover. Nonperiodic Traditional IRA payments generally have a 10% federal withholding default that can be changed or declined, subject to applicable restrictions. Roth IRA payments generally are not subject to federal withholding, except earnings returned with excess contributions. That withholding distinction does not determine whether a particular Roth withdrawal is taxable. State withholding is separate.

To roll over the entire employer-plan distribution after withholding, replace the withheld amount from other funds within the applicable deadline. This replacement is part of the rollover, not an extra regular IRA contribution.

Moving all pre-tax money directly to a Roth avoids mandatory rollover withholding, but it does not erase conversion income. Actual added tax depends on graduated brackets, deductions and other income-related effects—not simply the account balance multiplied by today’s marginal rate. IRS withholding and reporting instructions.

Which accounts can move to a Roth IRA?

• Traditional and traditional SEP IRAs: eligible amounts can be converted. Non-deductible IRA basis is handled under the IRA aggregation/pro-rata rules; you cannot simply label one IRA’s dollars as the tax-free portion. See the pro-rata rule.
• A traditional SIMPLE IRA: a Roth conversion generally must wait until the two-year participation period ends. During that initial period, tax-free movement is generally limited to another SIMPLE IRA. Confirm the participation start date with the provider.
• A 401(k) or other eligible employer plan: the distribution must be eligible and the plan must permit a distribution at that time. Pre-tax amounts sent to Roth are generally taxable. A valid designated Roth-account-to-Roth-IRA rollover generally does not create current income tax.
• Your own Roth IRA: a same-type trustee transfer or an eligible Roth-to-Roth rollover can move the money. A Roth IRA cannot be rolled into a Roth 401(k).
• An IRA moving into an employer plan: the receiving plan must accept the rollover, and only the otherwise-taxable IRA amount can go by this route. Do not move IRA after-tax basis into the plan.

Not every payment is eligible. Required minimum distributions cannot be rolled over. Employer-plan hardship distributions are also excluded. Nonspouse inherited accounts have special direct-transfer rules; a payment to the beneficiary generally cannot be repaired with an ordinary 60-day rollover. Check the IRS rollover eligibility guidance and our nonspouse beneficiary guide before treating inherited money like your own IRA.

A valid rollover is not a regular IRA contribution, so it does not use the annual regular-contribution limit. Roth conversions do not have the income limit that applies to direct Roth IRA contributions. Those distinctions do not make an otherwise ineligible rollover valid.

What if a 401(k) contains both pre-tax and after-tax money?

After-tax non-Roth contributions are different from a designated Roth 401(k) account. Under Notice 2014-54, disbursements from a plan scheduled at the same time can be treated as one distribution for allocating pre-tax and after-tax amounts among destinations.

Example: An eligible $100,000 distribution consists of $80,000 pre-tax money and $20,000 after-tax non-Roth contributions. With a properly coordinated allocation, $80,000 can go to a Traditional IRA and $20,000 to a Roth IRA without current federal income tax on those rolled amounts. Earnings on the after-tax contributions are pre-tax money, not additional after-tax basis.

This does not let someone withdraw only the after-tax basis while leaving all associated pre-tax amounts behind. Nor does the notice require every transaction to be direct: its allocation rules also address combinations of direct and 60-day rollovers. Confirm the allocation with the plan before it pays. IRS after-tax rollover explanation · Mega backdoor Roth guide.

What did the IRS propose in August 2026?

Notice 2026-49 proposes optional sample forms and processing procedures. It concerns movements involving at least one employer plan; its forms are not intended for IRA-to-IRA rollovers or transfers. The notice was announced August 12, 2026 and published in the August 24 Internal Revenue Bulletin.

The proposed handoff has five steps:

1. You send a request and authorization to the receiving institution.
2. That institution requests the rollover from the sending institution.
3. The sender verifies the request and provides account/source information.
4. The receiver confirms it can accept the money and selects a transfer method.
5. The sender completes the transfer.

What this does not do: require every provider to use the forms, force a plan to accept incoming rollovers, change the tax treatment of a Roth conversion, or supply a new safe harbor. Possible future rules for electronic transfers and participant-delivered checks are still under consideration in the notice. The published comment deadline is October 23, 2026.

For a rollover now, ask the receiving provider which process it supports and get its payee/account instructions. The sample paperwork is not permission to skip eligibility checks or existing deadlines. Notice 2026-49, sections III–V and appendix · Tracker entry.

Which tax forms should you expect?

A form records a transaction; it does not, by itself, decide how much tax you owe. Keep the distribution statement, receiving-account confirmation, dates and any after-tax basis records.

• Same-type IRA trustee transfer: generally no Form 1099-R or Form 5498 rollover entry for the transfer. Ordinary IRA year-end value reporting can still occur.
• Employer-plan rollover into an IRA: generally Form 1099-R from the plan and Form 5498 box 2 from the IRA provider. A direct pre-tax-plan rollover typically uses code G; a direct designated Roth-account-to-Roth-IRA rollover uses code H. Code G does not guarantee zero taxable income.
• Traditional-to-Roth IRA conversion: generally Form 1099-R, Form 5498 box 3 and Form 8606 Part II. Part I may also be needed for nondeductible basis. An employer-plan-to-Roth-IRA rollover does not become a Form 8606 IRA conversion merely because its destination is Roth.
• A tax-free 60-day rollover: report it using the applicable IRA or pension/annuity section of the return and that year’s rollover instructions. Form 8606 is not a universal rollover receipt.

Form 5498 is informational and may arrive after the filing deadline. Use your own transaction records and the relevant tax-year instructions. See the Form 1099-R guide, Form 5498 guide, and IRS payer instructions.

Before moving the money, check what changes

Direct handling reduces common administrative risks; it does not make a move risk-free or automatically worthwhile. Compare the actual fees, investments and distribution options of the accounts involved.

• Access: the employer-plan separation-from-service exception often called the rule of 55 does not apply to IRA withdrawals. A partial rollover leaves the remaining plan balance subject to that plan’s rules. Other exceptions may apply; see IRA versus 401(k) differences.
• Roth timing: a Roth 401(k)’s holding period does not carry into the Roth IRA qualified-distribution clock. An already-established Roth IRA clock may help; taxable conversion amounts have a separate additional-tax clock. See the five-year rules.
• Charitable giving: a qualified charitable distribution is a payment to charity, not a rollover into another retirement account. Roth IRAs are not categorically ineligible, but the exclusion generally has no benefit for money already distributable tax-free. See QCDs and Roth IRAs.

Frequently asked questions

Does a direct rollover mean I owe no tax?

No. Direct describes the payment route. Pre-tax money moving to a Roth IRA is generally included in income even when the institutions transfer it directly. An eligible pre-tax-plan rollover to a Traditional IRA has a different tax result.

Can a check mailed to me still be a direct rollover?

Yes. Under current employer-plan rules, a check payable only to the receiving trustee or custodian for your benefit can remain a direct rollover when you deliver it. A check payable to you personally generally uses the participant-paid, 60-day route.

Do Roth conversions use my one IRA rollover for the year?

No. Traditional-to-Roth IRA conversions are excluded from the IRA one-per-12-month limit. Trustee transfers and rollovers involving employer plans are also excluded. The limit generally covers eligible IRA-to-IRA rollovers through money paid to you.

Does missing 60 days make the entire amount taxable?

Not automatically. If no relief applies, the unrolled amount remains a distribution. Its tax treatment depends on account type, basis, Roth distribution rules and any additional-tax exception. Self-certification may support a late rollover, but it is not an IRS waiver.

Is withheld rollover money taxed twice?

No. Withholding is credited against your total tax liability. An amount not rolled over can be taxable and may face additional tax, but the withholding itself is not a second tax. Rolling pre-tax money to Roth still creates income even when the rollover is complete.

Must my provider use the new IRS rollover forms?

No. Notice 2026-49 describes optional sample forms and proposed procedures, not a universal mandate. The forms are not intended for IRA-to-IRA moves and do not make a receiving plan accept a rollover or change the underlying tax rules.

Corrections and updates

Correction · September 26, 2026: Corrected direct-versus-indirect terminology, check-payee and IRA frequency rules, tax/reporting statements, the deadline example and withholding illustrations. Also corrected SIMPLE, mixed-plan-money, access and charitable-distribution explanations. Direct payment does not guarantee tax-free treatment. Full correction record.

Update · September 26, 2026: Added the IRS’s August 2026 optional rollover forms and proposed procedures, separately from the corrections above. The guide distinguishes current rules from ideas still under consideration.