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Roth IRA Rollover Rules

A rollover is the moving of any investment from its current custodian to another. A Roth IRA must meet the following requirements to keep its tax-deferred status:

  • The account may be rolled over only once per year.
  • The funds must be placed into the new IRA within 60 days, or a taxable distribution will have occurred.
  • If any or all of the IRA funds are not rolled over, the 10 percent early distribution penalty will apply to taxpayers under age 59½, in addition to ordinary income tax.

A traditional IRA may be rolled over to a Roth (Roth conversion) as long as the individual's modified adjusted gross income is $100,000 or less. Any amount that was not taxed while in the traditional IRA will be taxed when it is rolled over to the Roth IRA.

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