A rollover occurs when you take a distribution of cash or other assets from one qualified employer retirement plan and contribute all or part of it within 60 days to another qualified retirement plan. This transaction is not taxable but it is reportable. You can roll over most distributions except:

1. The nontaxable part of a distribution, such as your after tax contributions to a retirement plan,
2. A required minimum distribution; or
3. A distribution that is one of a series of payments based on life expectancy or paid over a period of ten years or more.

Any taxable amount that is not rolled over must be included as income in the year you receive it.

If the distribution is paid to you, you have 60 days to roll it over from the date you receive it. Any taxable distribution paid to you is subject to a mandatory withholding of 20%, even if you intend to later roll it over. If you do later roll it over, and want to defer tax on the entire taxable portion, you will have to add funds from other sources equal to the amount withheld. You can choose to have your employer transfer a distribution directly to another eligible plan or to an IRA. Under this option, taxes are not withheld.

If you are under age 59� at the time of the distribution, any taxable portion not rolled over may be subject to a 10% additional tax on early distributions.

For further information about rollovers and transfers, see Publication 575. Publications can be downloaded from this site, or ordered by calling 1-800-829-3676.

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