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previous page Previous Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - Distributions and Rollovers
next page Next Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - Tax-Free Rollovers
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p571-022.htm#en_us_publink1000129473

Transfer of Interest in 403(b) Contract(p14)


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taxmap/pubs/p571-022.htm#en_us_publink1000129474

90-24 transfer.(p14)


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If you transfer all or part of your interest from a 403(b) account to another 403(b) account, the transfer is tax free. This is known as a 90-24 transfer. However, this treatment applies only if the transferred interest is subject to the same or stricter distribution restrictions. This rule applies regardless of whether you are a current employee, a former employee, or a beneficiary of a former employee. After September 24, 2007, you may no longer make a 90-24 transfer without your employer's involvement.
Transfers that do not satisfy this rule are plan distributions and are generally taxable as ordinary income.
taxmap/pubs/p571-022.htm#en_us_publink1000129475

Tax-free transfers for certain cash distributions.(p14)


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A tax-free transfer may also apply to a cash distribution of your 403(b) account from an insurance company that is subject to a rehabilitation, conservatorship, insolvency, or similar state proceeding. To receive tax-free treatment, you must do all of the following.
In addition to the preceding requirements, you must provide the new insurer with a written statement containing all of the following information:
Also, you must attach the following items to your timely filed income tax return in the year you receive the first distribution of cash.
  1. A copy of the statement you gave the new insurer.
  2. A statement that includes:
    1. The words ELECTION UNDER REV. PROC. 92-44,
    2. The name of the company that issued the new contract, and
    3. The new policy number.
taxmap/pubs/p571-022.htm#en_us_publink1000129476

Direct trustee-to-trustee transfer.(p14)


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If you make a direct trustee-to-trustee transfer, from your governmental 403(b) account to a defined benefit governmental plan, it may not be includible in gross income.
The transfer amount is not includible in gross income if it is made to:
taxmap/pubs/p571-022.htm#en_us_publink1000129477

After-tax contributions.(p14)
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For distributions beginning after December 31, 2006, after-tax contributions can be rolled over between a 403(b) plan and a defined benefit plan, IRA, or a defined contribution plan. If the rollover is to or from a 403(b) plan, it must occur through a direct trustee-to-trustee transfer.
taxmap/pubs/p571-022.htm#en_us_publink1000129478

Permissive service credit.(p14)
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A permissive service credit is credit for a period of service recognized by a defined benefit governmental plan, only if you voluntarily contribute to the plan an amount that does not exceed the amount necessary to fund the benefit attributable to the period of service and the amount contributed is in addition to the regular employee contribution, if any, under the plan.
Permissive service credit may also include service credit for up to 5 years where there is no performance of service, or service credited to provide an increased benefit for service credit which a participant is receiving under the plan.
Check with your plan administrator as to the type and extent of service that may be purchased by this transfer.
previous pagePrevious Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - Distributions and Rollovers
next pageNext Page: Publication 571 - Tax-Sheltered Annuity Plans (403(b) Plans) - Tax-Free Rollovers
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication