Can I split my distribution (i.e., roll over a portion to a traditional IRA or an eligible retirement plan and keep the remainder as a taxable distribution)?
Yes. According to the rules, you may split an eligible rollover distribution by having a portion paid as a direct rollover to a traditional IRA or eligible retirement plan and receiving the remaining portion as a taxable distribution (which is then subject to 20% withholding). Your employer, however, is not required to permit a split if the amount that is paid as a direct rollover is $500 or less.
Related Questions
- Why did I receive Form 1099-R showing the distribution from my IRA/tax-qualified retirement plan as being taxable when I indirectly rolled it over to another eligible retirement plan?
- Can I split my distribution (i.e., roll over a portion to a traditional IRA or an eligible retirement plan and keep the remainder as a taxable distribution)?
- How can I initiate a direct rollover from my current retirement plan to a traditional IRA or another eligible retirement plan?
