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IRS.gov Website
Publication 590
taxmap/pubs/p590-016.htm#en_us_publink1000231029

Can You Move Amounts 
Into a Roth IRA?(p63)

rule
You may be able to convert amounts from either a traditional, SEP, or SIMPLE IRA into a Roth IRA. You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA.
taxmap/pubs/p590-016.htm#en_us_publink1000231030

Conversions(p63)

rule
You can convert a traditional IRA to a Roth IRA. The conversion is treated as a rollover, regardless of the conversion method used. Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another, apply to these rollovers. However, the 1-year waiting period does not apply.
taxmap/pubs/p590-016.htm#en_us_publink1000231032

Conversion methods.(p63)

rule
You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways.
taxmap/pubs/p590-016.htm#en_us_publink1000231033
Same trustee.(p63)
Conversions made with the same trustee can be made by redesignating the traditional IRA as a Roth IRA, rather than opening a new account or issuing a new contract.
taxmap/pubs/p590-016.htm#en_us_publink1000248508

Income.(p63)

rule
You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. For 2010 conversions, special rules apply. See Special rules for 2010 conversions from traditional IRAs to Roth IRAs, next.
taxmap/pubs/p590-016.htm#en_us_publink1000248537

Special rules for 2010 conversions from traditional IRAs to Roth IRAs.(p63)

rule
If in 2010, you convert a traditional IRA to a Roth IRA, any amount you must include in income as a result of the conversion is generally included in equal amounts over a 2-year period, beginning in 2011. This means you include one half of the amount in income in 2011 and the other half in income in 2012. You must file Form 8606 to report a conversion from a traditional IRA to a Roth IRA
taxmap/pubs/p590-016.htm#en_us_publink1000253533
Election not to use 2-year period.(p63)
You can elect to include the total amount of the conversion in income in 2010 rather than in equal amounts over the 2-year period (2011 and 2012). You make the election on Form 8606. If you make this election, you cannot change it after the due date (including extensions) for your 2010 tax return.
taxmap/pubs/p590-016.htm#en_us_publink1000253534

Later withdrawals from Roth IRA.(p63)

rule
If you include the taxable part of a 2010 conversion in equal amounts over the 2-year period (2011 and 2012) and in 2010 you withdraw from the Roth IRA any amount allocable to the taxable part of the conversion, you will generally have to include in income for 2010 the part of the withdrawal made during the year that is allocable to the taxable part of the conversion.
Any amount allocable to the conversion that is included in income in 2010 because of the distribution from the Roth IRA first reduces the taxable amount that is reportable in income in 2012. The taxable amount that is reportable in income in 2011 is reduced next. The most that can be included in income because of the withdrawal of a conversion amount for any one year is the total amount required to be included in income for 2011 and 2012 minus the amounts included in income in all preceding years in the period.
taxmap/pubs/p590-016.htm#en_us_publink1000253535

Death of Roth IRA owner.(p63)

rule
If a Roth IRA owner who is including amounts in income ratably over 2011 and 2012 dies before including all of the amounts in income, any amounts not included must generally be included in the owner's gross income for the year of death. However, if the owner's surviving spouse receives the entire interest in all the owner's Roth IRAs, that spouse can elect to continue to ratably include the amounts in income in 2011 and 2012. The election cannot be made or changed after the due date (including extensions) for the surviving spouse's tax return that include the date of the owner's death. Any amount includible in the decedent's (owner's) gross income for the year of death under this rule must be reported on the decedent's final income tax return.
taxmap/pubs/p590-016.htm#en_us_publink1000231034

More information.(p63)

rule
For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1.
taxmap/pubs/p590-016.htm#en_us_publink1000231036

Rollover From Employer's Plan Into a Roth IRA(p63)

rule
You can roll over into a Roth IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan.
taxmap/pubs/p590-016.htm#en_us_publink1000231041

Rollover methods.(p63)

rule
You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways.
taxmap/pubs/p590-016.htm#en_us_publink1000231038

Income.(p64)

rule
You must include in your gross income distributions from a qualified retirement plan that you would have had to include in income if you had not rolled them over into a Roth IRA. You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions (after-tax contributions) to the plan that were taxable to you when paid. These amounts are normally included in income on your return for the year of the rollover from the qualified employer plan to a Roth IRA. For 2010 rollovers, special rules apply. See Special rules for 2010 rollovers from qualified retirement plans into Roth IRAs, next.
taxmap/pubs/p590-016.htm#en_us_publink1000240608

Special rules for 2010 rollovers from qualified retirement plans into Roth IRAs.(p64)

rule
If in 2010 you roll over an amount from a qualified retirement plan to a Roth IRA, any amount you must include in income as a result of the rollover is generally included in equal amounts over a 2-year period, beginning in 2011. This means you include one half of the amount in income in 2011 and the other half in income in 2012. You must file Form 8606 to report a rollover from a qualified retirement plan to a Roth IRA.
taxmap/pubs/p590-016.htm#en_us_publink1000253536
Election not to use 2-year period.(p64)
You can elect to include the total amount of the rollover in income in 2010 rather than in equal amounts over the 2-year period (2011 and 2012). You make this election on Form 8606. If you make this election, you cannot change it after the due date (including extensions) for your 2010 tax return.
Special rules may also apply for withdrawals from a Roth IRA after the rollover, and for the death of a Roth IRA owner. See Later withdrawals from the Roth IRA and Death of Roth IRA owner, earlier.
Form 8606.You must file Form 8606 with your tax return to report 2010 rollovers from qualified retirement plans (other than designated Roth accounts) to Roth IRAs (unless you recharacterized the entire amount), and to figure the amount to include in income. See the instructions for Form 8606 for more information.
taxmap/pubs/p590-016.htm#en_us_publink1000248147

Example.(p64)

In 2010, Tony converted his traditional IRA to a Roth IRA. The IRA was made up only of deductible contributions and earnings at the time of the conversion and valued at $10,000. Tony would complete Form 8606 and include $5,000 in his taxable income in 2011 and $5,000 in his taxable income in 2012. Alternatively, Tony could elect to include the entire $10,000 in his taxable income in 2010.
EIC
If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. See Publication 505, Tax Withholding and Estimated Tax.
For more information on eligible rollover distributions from qualified retirement plans and withholding, see Rollover From Employer's Plan Into an IRA in chapter 1.
taxmap/pubs/p590-016.htm#en_us_publink1000231044

Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments(p64)

rule
If you received a military death gratuity or SGLI payment with respect to a death from injury that occurred after October 6, 2001, you can contribute (roll over) all or part of the amount received to your Roth IRA. The contribution is treated as a qualified rollover contribution.
The amount you can roll over to your Roth IRA cannot exceed the total amount that you received reduced by any part of that amount that was contributed to a Coverdell ESA or another Roth IRA. Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers.
The rollover must be completed before the end of the 1-year period beginning on the date you received the payment.
The amount contributed to your Roth IRA is treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed.
taxmap/pubs/p590-016.htm#en_us_publink1000231050

Rollover From a Roth IRA(p64)

rule
You can withdraw, tax free, all or part of the assets from one Roth IRA if you contribute them within 60 days to another Roth IRA. Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another, apply to these rollovers. However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers.
A rollover from a Roth IRA to an employer retirement plan is not allowed.
A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA.
If you roll over an amount from one Roth IRA to another Roth IRA, the 5-year period used to determine qualified distributions does not change. The 5-year period begins with the first taxable year for which the contribution was made to the initial Roth IRA. See What are Qualified Distributions? later.
taxmap/pubs/p590-016.htm#en_us_publink1000231052

Rollover of Exxon Valdez Settlement Income(p64)

rule
If you are a qualified taxpayer and you received qualified settlement income, you can contribute all or part of the amount received to an eligible retirement plan which includes a Roth IRA. The rules for contributing qualified settlement income to a Roth IRA are the same as the rules for contributing qualified settlement income to a traditional IRA with the following exception. Qualified settlement income that is contributed to a Roth IRA, or to a designated Roth account, will be:
For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1.
taxmap/pubs/p590-016.htm#en_us_publink1000231054

Rollover of Airline Payments(p65)

rule
If you are a qualified airline employee, you may contribute any portion of an airline payment you receive to a Roth IRA. The contribution must be made within 180 days from the date you received the payment. The contribution will be treated as a qualified rollover contribution. The rollover contribution is included in income to the extent it would be included in income if it were not part of the rollover contribution. Also, any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can contribute to your Roth IRA.
taxmap/pubs/p590-016.htm#en_us_publink1000231055

Airline payment.(p65)

rule
An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. The payment also must be made both: An airline payment amount shall not include any amount payable on the basis of the carrier's future earnings or profits.
taxmap/pubs/p590-016.htm#en_us_publink1000231056

Qualified airline employee.(p65)

rule
A qualified airline employee is an employee or former employee of a commercial airline carrier who was a participant in a qualified defined benefit plan maintained by the carrier which was terminated or became subject to restrictions under Section 402(b) of the Pension Protection Act of 2006.
For more information, see Form 8935, Airline Payment Report. This form will be sent to you within 90 days following an airline payment. The form will indicate the amount of the airline payment that is eligible to be rolled over to a Roth IRA.