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.
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: