Publication 571 - Tax-Sheltered Annuity Plans (403(B) Plans) Page 13
Download a blank fillable Publication 571 - Tax-Sheltered Annuity Plans (403(B) Plans) in PDF format just by clicking the "DOWNLOAD PDF" button.
Open the file in any PDF-viewing software. Adobe Reader or any alternative for Windows or MacOS are required to access and complete fillable content.
Complete Publication 571 - Tax-Sheltered Annuity Plans (403(B) Plans) with your personal data - all interactive fields are highlighted in places where you should type, access drop-down lists or select multiple-choice options.
Some fillable PDF-files have the option of saving the completed form that contains your own data for later use or sending it out straight away.
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21•
Check with your employer, plan admin-
Reinvest the cash distribution in a single
A Permissive service credit may also include
istrator, or provider to find out whether
policy or contract issued by another insur-
service credit for up to 5 years where there is no
TIP
this rule also applies to pre-1987 ac-
ance company or in a single custodial ac-
performance of service, or service credited to
cruals. If not, a minimum amount of these accru-
provide an increased benefit for service credit
count subject to the same or stricter
als must begin to be distributed by the later of
which a participant is receiving under the plan.
distribution restrictions as the original con-
the end of the calendar year in which you reach
Check with your plan administrator as to the
tract not later than 60 days after you re-
age 75 or April 1 of the calendar year following
type and extent of service that may be pur-
ceive the cash distribution.
retirement. For each year thereafter, the mini-
chased by this transfer.
•
Assign all future distribution rights to the
mum distribution must be made by the last day
new contract or account for investment in
of the year. If you do not receive the required
that contract or account if you received an
minimum distribution, you are subject to a non-
Tax-Free Rollovers
amount that is less than what you are enti-
deductible 50% excise tax on the difference be-
tled to because of state restrictions.
tween the required minimum distribution and the
amount actually distributed.
You can generally roll over tax free all or any
In addition to the preceding requirements, you
part of a distribution from a 403(b) plan to a
must provide the new insurer with a written
No Special 10-Year Tax
traditional IRA or a non-Roth eligible retirement
statement containing all of the following informa-
plan, except for any nonqualifying distributions,
Option
tion:
described later. You may also roll over any part
•
The gross amount of cash distributed
of a distribution from a 403(b) plan by converting
A distribution from a 403(b) plan does not qualify
under the old contract.
it through a direct rollover, described below, to a
as a lump-sum distribution. This means you can-
Roth IRA. Conversion amounts are generally
•
not use the special 10-year tax option to calcu-
The amount of cash reinvested in the new
includible in your taxable income in the year of
late the taxable portion of a 403(b) distribution.
contract.
the distribution from your 403(b) account. See
For more information, see Publication 575.
•
Your investment in the old contract on the
Publication 590 for more information about con-
version into a Roth IRA.
date you receive your first cash distribu-
tion.
Rollovers to and from 403(b) plans. You can
Transfer of Interest in
generally roll over tax free all or any part of a
Also, you must attach the following items to
403(b) Contract
distribution from an eligible retirement plan to a
your timely filed income tax return in the year
403(b) plan. Beginning January 1, 2008, distri-
you receive the first distribution of cash.
butions from tax-qualified retirement plans and
1. A copy of the statement you gave the new
tax-sheltered annuities can be converted by
Contract exchanges. If you transfer all or part
insurer.
making a direct rollover into a Roth IRA subject
of your interest from a 403(b) contract to another
to the restrictions that currently apply to rollovers
403(b) contract (held in the same plan), the
2. A statement that includes:
from a traditional IRA into a Roth IRA. Converted
transfer is tax free, and is referred to as a con-
amounts are generally includible in your taxable
a. The words ELECTION UNDER REV.
tract exchange. This was previously known as a
income in the year of the distribution from your
PROC. 92-44,
90-24 transfer. A contract exchange is similar to
403(b) account. See Publication 590 for more
a 90-24 transfer with one major difference. Pre-
b. The name of the company that issued
information on conversion into a Roth IRA.
viously, you were able to accomplish the trans-
the new contract, and
If a distribution includes both pre-tax contri-
fer without your employer’s involvement. After
butions and after-tax contributions, the portion of
c. The new policy number.
September 24, 2007, all such transfers are ac-
the distribution that is rolled over is treated as
complished through a contract exchange requir-
consisting first of pre-tax amounts (contributions
ing your employer’s involvement. In addition, the
and earnings that would be includible in income
Direct trustee-to-trustee transfer. If you
plan must provide for the exchange and the
if no rollover occurred). This means that if you
transferred interest must be subject to the same
make a direct trustee-to-trustee transfer, from
roll over an amount that is at least as much as
or stricter distribution restrictions. Finally, your
your governmental 403(b) account to a defined
the pre-tax portion of the distribution, you do not
accumulated benefit after the exchange must be
benefit governmental plan, it may not be includi-
have to include any of the distribution in income.
equal to what it was before the exchange.
ble in gross income.
For more information on rollovers and eligi-
Transfers that do not satisfy this rule are plan
The transfer amount is not includible in gross
ble retirement plans, see Publication 575.
distributions and are generally taxable as ordi-
income if it is made to:
nary income.
If you roll over money or other property
•
Purchase permissive service credits, or
!
from a 403(b) plan to an eligible retire-
•
Repay contributions and earnings that
ment plan, see Publication 575 for in-
Plan-to-plan transfers. You may also trans-
CAUTION
were previously refunded under a forfei-
formation about possible effects on later
fer part or all of your interest from a 403(b) plan
ture of service credit under the plan, or
distributions from the eligible retirement plan.
to another 403(b) plan if you are an employee of
under another plan maintained by a state
(or were formerly employed by) the employer of
Hardship exception to rollover rules. The
or local government employer within the
the plan to which you would like to transfer. Both
IRS may waive the 60-day rollover period if the
same state.
the initial plan and the receiving plan must pro-
failure to waive such requirement would be
vide for transfers. Your accumulated benefit af-
against equity or good conscience, including
After-tax contributions. For distributions
ter the transfer must be at least equal to what it
cases of casualty, disaster, or other events be-
beginning after December 31, 2006, after-tax
was before the transfer. The new plan’s restric-
yond the reasonable control of an individual.
contributions can be rolled over between a
tions on distributions must be the same or
To obtain a hardship exception, you must
403(b) plan and a defined benefit plan, IRA, or a
stricter than those of the original plan.
apply to the IRS for a waiver of the 60-day
defined contribution plan. If the rollover is to or
rollover requirement. You apply for the waiver by
from a 403(b) plan, it must occur through a direct
Tax-free transfers for certain cash distribu-
following the general instructions used in re-
tions. A tax-free transfer may also apply to a
trustee-to-trustee transfer.
questing a letter ruling. These instructions are
cash distribution of your 403(b) account from an
Permissive service credit. A permissive
stated in Revenue Procedure 2011-4, which is
insurance company that is subject to a rehabili-
service credit is credit for a period of service
on page 123 of Internal Revenue Bulletin 2011-1
tation, conservatorship, insolvency, or similar
recognized by a defined benefit governmental
at , or see
state proceeding. To receive tax-free treatment,
plan, only if you voluntarily contribute to the plan
the latest annual update. You must also pay a
you must do all of the following:
an amount that does not exceed the amount
user fee with the application. The user fee for a
•
necessary to fund the benefit attributable to the
Withdraw all the cash to which you are
rollover that is less than $50,000 is $500. For
entitled in full settlement of your contract
period of service and the amount contributed is
rollovers that are $50,000 or more, see Revenue
rights or, if less, the maximum permitted
in addition to the regular employee contribution,
Procedure 2011-8, which is on page 237 of
by the state.
if any, under the plan.
Internal Revenue Bulletin 2011-1 at
Chapter 8 Distributions and Rollovers
Page 13
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial