26 USC 408A - Roth IRAs
(a) General rule
Except as provided in this section, a Roth IRA shall be treated for purposes of this title in the same manner as an individual retirement plan.
Except as provided in this section, a Roth IRA shall be treated for purposes of this title in the same manner as an individual retirement plan.
(b) Roth IRA
For purposes of this title, the term Roth IRA means an individual retirement plan (as defined in section 7701 (a)(37)) which is designated (in such manner as the Secretary may prescribe) at the time of establishment of the plan as a Roth IRA. Such designation shall be made in such manner as the Secretary may prescribe.
For purposes of this title, the term Roth IRA means an individual retirement plan (as defined in section 7701 (a)(37)) which is designated (in such manner as the Secretary may prescribe) at the time of establishment of the plan as a Roth IRA. Such designation shall be made in such manner as the Secretary may prescribe.
(c) Treatment of contributions
(1) No deduction allowed
No deduction shall be allowed under section 219 for a contribution to a Roth IRA.
No deduction shall be allowed under section 219 for a contribution to a Roth IRA.
(2) Contribution limit
The aggregate amount of contributions for any taxable year to all Roth IRAs maintained for the benefit of an individual shall not exceed the excess (if any) of
The aggregate amount of contributions for any taxable year to all Roth IRAs maintained for the benefit of an individual shall not exceed the excess (if any) of
(A) the maximum amount allowable as a deduction under section 219 with respect to such individual for such taxable year (computed without regard to subsection (d)(1) or (g) of such section), over
(B) the aggregate amount of contributions for such taxable year to all other individual retirement plans (other than Roth IRAs) maintained for the benefit of the individual.
(3) Limits based on modified adjusted gross income
(A) Dollar limit
The amount determined under paragraph (2) for any taxable year shall not exceed an amount equal to the amount determined under paragraph (2)(A) for such taxable year, reduced (but not below zero) by the amount which bears the same ratio to such amount as
The amount determined under paragraph (2) for any taxable year shall not exceed an amount equal to the amount determined under paragraph (2)(A) for such taxable year, reduced (but not below zero) by the amount which bears the same ratio to such amount as
(i) the excess of
(I) the taxpayers adjusted gross income for such taxable year, over
(II) the applicable dollar amount, bears to
(ii) $15,000 ($10,000 in the case of a joint return or a married individual filing a separate return).
The rules of subparagraphs (B) and (C) of section 219 (g)(2) shall apply to any reduction under this subparagraph.
(B) Rollover from eligible retirement plan
A taxpayer shall not be allowed to make a qualified rollover contribution to a Roth IRA from an an[1] eligible retirement plan (as defined by section 402 (c)(8)(B)) other than a Roth IRA during any taxable year if, for the taxable year of the distribution to which such contribution relates
A taxpayer shall not be allowed to make a qualified rollover contribution to a Roth IRA from an an[1] eligible retirement plan (as defined by section 402 (c)(8)(B)) other than a Roth IRA during any taxable year if, for the taxable year of the distribution to which such contribution relates
(i) the taxpayers adjusted gross income exceeds $100,000, or
(ii) the taxpayer is a married individual filing a separate return.
(C) 2 Definitions
For purposes of this paragraph
For purposes of this paragraph
(i) adjusted gross income shall be determined in the same manner as under section 219 (g)(3), except that
(I) any amount included in gross income under subsection (d)(3) shall not be taken into account; and
(II) any amount included in gross income by reason of a required distribution under a provision described in paragraph (5) shall not be taken into account for purposes of subparagraph (B)(i), and
(ii) the applicable dollar amount is
(I) in the case of a taxpayer filing a joint return, $150,000,
(II) in the case of any other taxpayer (other than a married individual filing a separate return), $95,000, and
(III) in the case of a married individual filing a separate return, zero.
(C) 2 Inflation adjustment
In the case of any taxable year beginning in a calendar year after 2006, the dollar amounts in subclauses (I) and (II) of subparagraph (C)(ii) shall each be increased by an amount equal to
In the case of any taxable year beginning in a calendar year after 2006, the dollar amounts in subclauses (I) and (II) of subparagraph (C)(ii) shall each be increased by an amount equal to
(i) such dollar amount, multiplied by
(ii) the cost-of-living adjustment determined under section 1 (f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2005 for calendar year 1992 in subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000.
(4) Contributions permitted after age 701/2
Contributions to a Roth IRA may be made even after the individual for whom the account is maintained has attained age 701/2.
Contributions to a Roth IRA may be made even after the individual for whom the account is maintained has attained age 701/2.
(5) Mandatory distribution rules not to apply before death
Notwithstanding subsections (a)(6) and (b)(3) of section 408 (relating to required distributions), the following provisions shall not apply to any Roth IRA:
Notwithstanding subsections (a)(6) and (b)(3) of section 408 (relating to required distributions), the following provisions shall not apply to any Roth IRA:
(6) Rollover contributions
(A) In general
No rollover contribution may be made to a Roth IRA unless it is a qualified rollover contribution.
No rollover contribution may be made to a Roth IRA unless it is a qualified rollover contribution.
(B) Coordination with limit
A qualified rollover contribution shall not be taken into account for purposes of paragraph (2).
A qualified rollover contribution shall not be taken into account for purposes of paragraph (2).
(d) Distribution rules
For purposes of this title
For purposes of this title
(1) Exclusion
Any qualified distribution from a Roth IRA shall not be includible in gross income.
Any qualified distribution from a Roth IRA shall not be includible in gross income.
(2) Qualified distribution
For purposes of this subsection
For purposes of this subsection
(A) In general
The term qualified distribution means any payment or distribution
The term qualified distribution means any payment or distribution
(i) made on or after the date on which the individual attains age 591/2,
(ii) made to a beneficiary (or to the estate of the individual) on or after the death of the individual,
(iv) which is a qualified special purpose distribution.
(B) Distributions within nonexclusion period
A payment or distribution from a Roth IRA shall not be treated as a qualified distribution under subparagraph (A) if such payment or distribution is made within the 5-taxable year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA (or such individuals spouse made a contribution to a Roth IRA) established for such individual.
A payment or distribution from a Roth IRA shall not be treated as a qualified distribution under subparagraph (A) if such payment or distribution is made within the 5-taxable year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA (or such individuals spouse made a contribution to a Roth IRA) established for such individual.
(3) Rollovers from an eligible retirement plan other than a Roth IRA
(A) In general
Notwithstanding sections 402 (c), 403 (b)(8), 408 (d)(3), and 457 (e)(16), in the case of any distribution to which this paragraph applies
Notwithstanding sections 402 (c), 403 (b)(8), 408 (d)(3), and 457 (e)(16), in the case of any distribution to which this paragraph applies
(i) there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution,
(iii) unless the taxpayer elects not to have this clause apply for any taxable year, any amount required to be included in gross income for such taxable year by reason of this paragraph for any distribution before January 1, 1999, shall be so included ratably over the 4-taxable year period beginning with such taxable year.
Any election under clause (iii) for any distributions during a taxable year may not be changed after the due date for such taxable year.
(B) Distributions to which paragraph applies
This paragraph shall apply to a distribution from an eligible retirement plan (as defined by section 402 (c)(8)(B)) (other than a Roth IRA) maintained for the benefit of an individual which is contributed to a Roth IRA maintained for the benefit of such individual in a qualified rollover contribution.
This paragraph shall apply to a distribution from an eligible retirement plan (as defined by section 402 (c)(8)(B)) (other than a Roth IRA) maintained for the benefit of an individual which is contributed to a Roth IRA maintained for the benefit of such individual in a qualified rollover contribution.
(C) Conversions
The conversion of an individual retirement plan (other than a Roth IRA) to a Roth IRA shall be treated for purposes of this paragraph as a distribution to which this paragraph applies.
The conversion of an individual retirement plan (other than a Roth IRA) to a Roth IRA shall be treated for purposes of this paragraph as a distribution to which this paragraph applies.
(D) Additional reporting requirements
Trustees of Roth IRAs, trustees of individual retirement plans, persons subject to section 6047 (d)(1), or all of the foregoing persons, whichever is appropriate, shall include such additional information in reports required under section 408 (i) or 6047 as the Secretary may require to ensure that amounts required to be included in gross income under subparagraph (A) are so included.
Trustees of Roth IRAs, trustees of individual retirement plans, persons subject to section 6047 (d)(1), or all of the foregoing persons, whichever is appropriate, shall include such additional information in reports required under section 408 (i) or 6047 as the Secretary may require to ensure that amounts required to be included in gross income under subparagraph (A) are so included.
(E) Special rules for contributions to which 4-year averaging applies
In the case of a qualified rollover contribution to a Roth IRA of a distribution to which subparagraph (A)(iii) applied, the following rules shall apply:
In the case of a qualified rollover contribution to a Roth IRA of a distribution to which subparagraph (A)(iii) applied, the following rules shall apply:
(i) Acceleration of inclusion
(I) In general The amount required to be included in gross income for each of the first 3 taxable years in the 4-year period under subparagraph (A)(iii) shall be increased by the aggregate distributions from Roth IRAs for such taxable year which are allocable under paragraph (4) to the portion of such qualified rollover contribution required to be included in gross income under subparagraph (A)(i).
(II) Limitation on aggregate amount included The amount required to be included in gross income for any taxable year under subparagraph (A)(iii) shall not exceed the aggregate amount required to be included in gross income under subparagraph (A)(iii) for all taxable years in the 4-year period (without regard to subclause (I)) reduced by amounts included for all preceding taxable years.
(ii) Death of distributee
(I) In general If the individual required to include amounts in gross income under such subparagraph dies before all of such amounts are included, all remaining amounts shall be included in gross income for the taxable year which includes the date of death.
(II) Special rule for surviving spouse If the spouse of the individual described in subclause (I) acquires the individuals entire interest in any Roth IRA to which such qualified rollover contribution is properly allocable, the spouse may elect to treat the remaining amounts described in subclause (I) as includible in the spouses gross income in the taxable years of the spouse ending with or within the taxable years of such individual in which such amounts would otherwise have been includible. Any such election may not be made or changed after the due date for the spouses taxable year which includes the date of death.
(F) Special rule for applying section 72
(i) In general If
(I) any portion of a distribution from a Roth IRA is properly allocable to a qualified rollover contribution described in this paragraph; and
(II) such distribution is made within the 5-taxable year period beginning with the taxable year in which such contribution was made,
then section 72 (t) shall be applied as if such portion were includible in gross income.
(ii) Limitation Clause (i) shall apply only to the extent of the amount of the qualified rollover contribution includible in gross income under subparagraph (A)(i).
(4) Aggregation and ordering rules
(A) Aggregation rules
Section 408 (d)(2) shall be applied separately with respect to Roth IRAs and other individual retirement plans.
Section 408 (d)(2) shall be applied separately with respect to Roth IRAs and other individual retirement plans.
(B) Ordering rules
For purposes of applying this section and section 72 to any distribution from a Roth IRA, such distribution shall be treated as made
For purposes of applying this section and section 72 to any distribution from a Roth IRA, such distribution shall be treated as made
(i) from contributions to the extent that the amount of such distribution, when added to all previous distributions from the Roth IRA, does not exceed the aggregate contributions to the Roth IRA; and
(ii) from such contributions in the following order:
(I) Contributions other than qualified rollover contributions to which paragraph (3) applies.
(II) Qualified rollover contributions to which paragraph (3) applies on a first-in, first-out basis.
Any distribution allocated to a qualified rollover contribution under clause (ii)(II) shall be allocated first to the portion of such contribution required to be included in gross income.
(5) Qualified special purpose distribution
For purposes of this section, the term qualified special purpose distribution means any distribution to which subparagraph (F) of section 72 (t)(2) applies.
For purposes of this section, the term qualified special purpose distribution means any distribution to which subparagraph (F) of section 72 (t)(2) applies.
(6) Taxpayer may make adjustments before due date
(A) In general
Except as provided by the Secretary, if, on or before the due date for any taxable year, a taxpayer transfers in a trustee-to-trustee transfer any contribution to an individual retirement plan made during such taxable year from such plan to any other individual retirement plan, then, for purposes of this chapter, such contribution shall be treated as having been made to the transferee plan (and not the transferor plan).
Except as provided by the Secretary, if, on or before the due date for any taxable year, a taxpayer transfers in a trustee-to-trustee transfer any contribution to an individual retirement plan made during such taxable year from such plan to any other individual retirement plan, then, for purposes of this chapter, such contribution shall be treated as having been made to the transferee plan (and not the transferor plan).
(B) Special rules
(i) Transfer of earnings Subparagraph (A) shall not apply to the transfer of any contribution unless such transfer is accompanied by any net income allocable to such contribution.
(ii) No deduction Subparagraph (A) shall apply to the transfer of any contribution only to the extent no deduction was allowed with respect to the contribution to the transferor plan.
(7) Due date
For purposes of this subsection, the due date for any taxable year is the date prescribed by law (including extensions of time) for filing the taxpayers return for such taxable year.
For purposes of this subsection, the due date for any taxable year is the date prescribed by law (including extensions of time) for filing the taxpayers return for such taxable year.
(e) Qualified rollover contribution
For purposes of this section, the term qualified rollover contribution means a rollover contribution
For purposes of this section, the term qualified rollover contribution means a rollover contribution
(1) to a Roth IRA from another such account,
(2) from an eligible retirement plan, but only if
(A) in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408 (d)(3), and
(B) in the case of any eligible retirement plan (as defined in section 402 (c)(8)(B) other than clauses (i) and (ii) thereof), such rollover contribution meets the requirements of section 402 (c), 403 (b)(8), or 457 (e)(16), as applicable.
For purposes of section 408 (d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.
(f) Individual retirement plan
For purposes of this section
For purposes of this section
(1) a simplified employee pension or a simple retirement account may not be designated as a Roth IRA; and
(2) contributions to any such pension or account shall not be taken into account for purposes of subsection (c)(2)(B).