Roth IRA Rollover RulesA 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.
Prior to 2010, a traditional IRA could be rolled over to a Roth (Roth conversion) as long as the individual’s modified adjusted gross income was $100,000 or less. Any amount that was not taxed while in the traditional IRA would be taxed when it was rolled over to the Roth IRA. Beginning in 2010, the income limit will no longer apply.