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Rev. Proc. 2020-46: Waiver of 60-day rollover requirement for retirement plans, IRAs; updated conditions

Waiver of 60-day rollover requirement

The IRS released an advance version of Rev. Proc. 2020-46 concerning the rules for waiver of the 60-day rollover requirement from one retirement plan or individual retirement arrangement (IRA) into another plan or IRA by providing a “self-certification procedure” for taxpayers to use in claiming rollover treatment.

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Rev. Proc. 2020-46 [PDF 115 KB] updates the list of conditions previously provided by Rev. Proc. 2016-47 to add a new reason—a distribution was made to a state's unclaimed property fund.

Summary

In general, an eligible distribution from an IRA or workplace retirement plan can only qualify for tax-free rollover treatment if it is contributed to another IRA or workplace plan by the 60th day after it was received. In most cases, taxpayers who fail to meet the time limit may obtain a waiver by requesting a private letter ruling from the IRS.

The IRS in August 2016 issued Rev. Proc. 2016-47 regarding a variety of mitigating circumstances that taxpayers may encounter, but allowing taxpayers to qualify for a waiver of the 60-day time limit and avoid possible early distribution taxes. Rev. Proc. 2016- 47 also included a “self-certification procedure” to be used by a taxpayer claiming eligibility for a waiver with respect to a rollover into a plan or IRA. Alternatively, a plan administrator or an IRA trustee, custodian, or issuer may rely on the certification in accepting and reporting receipt of a rollover contribution.

Rev. Proc. 2020-46 updates Rev. Proc. 2016-47 to include the new condition. 

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