Eligible Rollover Distribution

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Eligible Rollover Distribution

The amount of money in an IRA or other qualified retirement plan that may be rolled over into another plan. Rollovers occur most often when a person changes employers; they may occur without penalty once per year.
References in periodicals archive ?
6) Minimum age-required distributions and hardship distributions are not protected because they are not eligible rollover distributions.
Moving eligible rollover distributions into safe harbor IRAs can reduce the backlog of small accounts that build up on retirement plans and drive up costs, create administrative difficulties, and increase the risk of fiduciary liability.
If all or a portion of a distribution during 2009 is an eligible rollover distribution because it is no longer an RMD under this new law, the distribution is not treated as an eligible rollover distribution for purposes of the direct rollover requirements, including notices and written explanations, or for the mandatory 20 percent income tax withholding for eligible rollover distributions--to the extent the distribution would have been an RMD for 2009 without the new law.
The bill would also provide that eligible rollover distributions from qualified retirement plans, Section 403(b) annuities, IRAs, and governmental Section 457 plans could generally be rolled over to any such plan or arrangements.
The current-law, 20-percent withholding rate for eligible rollover distributions wouldn't change.
5 to address the federal income tax consequences of transferring eligible rollover distributions from qualified retirement plans to Roth IRAs.
An IRS spokesperson advised that the reg writers had not initially considered this issue, but now agree that distributions in excess of the RMD for 2001 as figured under the new rules are eligible rollover distributions.
Sec 401(a)(31): A qualified trust must provide for a direct trustee-to-trustee transfer (a direct rollover) of eligible rollover distributions.
402(f) notice on eligible rollover distributions to explain the new default option.
The IRS also ruled that the proposed payments would not be taxable to the participants when made to the plan; rather, when they are distributed from the plan, they will constitute eligible rollover distributions under Sec.
Hardship distributions are eligible rollover distributions and would be subject to 20% income tax withholding unless directly rolled over trustee-to-trustee to an IRA.