It depends. First, the receiving IRA must be a http://retirementdictionary.com/definitions/traditionalira Traditional (including a http://retirementdictionary.com/definitions/simplifiedemployeepensionsepira SEP) IRA. These amounts cannot be rolled over to a http://retirementdictionary.com/definitions/simpleira SIMPLE IRA until the SIMPLE IRA has been established for two years. And, the amount must be http://retirementdictionary.com/definitions/eligiblerolloverdistributionerd rollover eligible. Rollover eligible amounts usually include all of your account balance, except for the following amounts.
Part of a series of substantially equal payments made
• over a period of 10 years or longer
• over the participant’s life or http://retirementdictionary.com/definitions/lifeexpectancy life expectancy, or over the joint lives or joint life expectancies of the http://retirementdictionary.com/definitions/participan participant and the participant’s http://retirementdictionary.com/definitions/designatedbeneficiary designated beneficiary
• http://retirementdictionary.com/definitions/requiredminimumdistributionrmd Required minimum distribution amounts
• Any http://retirementdictionary.com/definitions/distribution distribution which is made upon hardship of the participant, or in the case of a http://retirementdictionary.com/definitions/457plan 457(b) plan, any http://retirementdictionary.com/definitions/distribution distribution on account of an unforeseeable emergency
• Death distributions made to nonspouse beneficiaries , unless the plan allows such rollovers
• Distributions due to a http://retirementdictionary.com/definitions/qualifieddomesticrelationsorder qualified domestic relations order (QDRO) paid to a nonspouse alternate-payee
• Return of an http://retirementdictionary.com/definitions/excesscontribution excess contribution, http://retirementdictionary.com/definitions/excessdeferral excess deferral, or excess http://retirementdictionary.com/definitions/annualaddition annual addition, together with allocable income
• The cost of life insurance coverage
• Deemed distributions upon the default of a participant loan
• Dividends paid on employer securities in an http://retirementdictionary.com/definitions/ESOP employee stock ownership plan (ESOP)
You can rollover the amount withheld for taxes from your other source of funds, if you want to do so; and when you file your tax return, the amount (that was withheld) would be treated as a credit towards any taxes you may owe, or increase your tax refund.
Note: Effective January 1, 2008, participants who are eligible to make withdrawal from a qualified plan, 403(b) plan, 403(a) plan or governmental 457(b) plan may rollover the withdrawn amounts to a http://retirementdictionary.com/definitions/rothira Roth IRA, providing the amount is rollover eligible. The individual must meet the Roth IRA conversion eligibility requirements, which are:
• The individual’s (couple’s, if married) http://retirementdictionary.com/definitions/modifiedadjustedgrossincomemagi MAGI cannot exceed $100,000
• The individual’s tax filing status cannot be married-filing-separately.
These two restrictions are repealed effective January 1, 2010.
See IRS Publication 575 for more information
Question answered by http://deniseappleby.com/ Denise Appleby