Support on this site for Internet Explorer 9 and Internet Explorer 10 will end on April 18, 2018. You must update your browser prior to then to continue accessing ubt.com and UBTgo Online Banking. Learn More Here >>

IRA Rollover Deadline Waiver

Leslie Gibbens,

April 02, 2018

Retiring Your Way, Growing Your Wealth, Managing Your Money

Articles

IRAs and employer-sponsored plans such as 401(k)s are powerful retirement savings tools, but they also provide valuable estate planning benefits. If you hold a traditional IRA for life, for example, your children or other heirs can stretch out distributions over their lifetimes, maximizing the IRA’s tax-deferred growth and preserving more wealth for the family. If, however, you receive a distribution from an employer plan (such as when you change jobs or retire) and you don’t roll over the funds into an IRA or new plan within 60 days, you can lose these benefits.

What are the Tax Consequences?

If you miss the 60-day deadline, you’ll be hit with ordinary income taxes plus a 10% penalty (if you’re under age 59½), taking a significant bite out of your estate. The IRS has provided some relief by streamlining procedures for obtaining a waiver of the 60-day time limit.

Previously, the only option was to apply to the IRS for a private letter ruling — a costly and time-consuming process. Now, if you miss the deadline, you can self-certify your eligibility for a waiver by sending a letter to the trustee or administrator of the plan.

Do You Qualify for a Waiver?

To qualify, you must have missed the deadline for one of 11 reasons. They include errors by the financial institution distributing or receiving the funds, misplaced distribution checks, post office errors, a death or serious illness in the family, and deposits into an account you mistakenly thought was an eligible retirement plan.

You must complete the rollover “as soon as practicable” (30 days is deemed sufficient) after the reasons for missing the deadline are no longer an obstacle. Even if you can’t (or don’t) self-certify, the IRS can still grant a waiver for these or other reasons in a subsequent examination.

Self-certification allows you to report a deposit as a valid rollover. But it doesn’t prevent the IRS from auditing your return and denying a waiver if it determines that you didn’t meet the requirements. Contact us with questions regarding how to maximize the estate planning benefits of your retirement accounts.

© 2018

Back to Top

Add new comment

WHERE DO I FIND THE ROLLOVER FORM ?

Hi Frank, thanks for reading and posting. We'll have a Rollover expert reach out to help you.

This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.


Investment products: Not FDIC Insured - No Bank Guarantee - May Lose Value.