August 31, 2016

Rollover Relief – Savers can Now Receive a Waiver to Extend the 60-day Deadline

Until now, retirement savers normally had just 60 days to roll over their 401(k) or IRA accounts before the account becomes taxable. Generally, this is plenty of time to effect a rollover, but occasionally hiccups happen – anything from a post office delay to a family illness – and the resulting tax burden, including a 10% penalty tax for account holders younger than 59 ½, can be devastating to a retirement nest egg.

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Now savers have a second chance if they miss the 60-day rollover window; the IRS is allowing a waiver of the deadline in specific cases. Retirement savers can request a waiver by self-certifying that one or more of 11 circumstances apply, including family death or illness, a misplaced check, severe damage to a home, and restrictions imposed by a foreign country.

This new rule was issued by the IRS on August 24, 2016 and is effective immediately. To learn more, visit:

https://www.irs.gov/uac/new-procedure-helps-people-making-ira-and-retirement-plan-rollovers