Retirement plan administrators, and IRA trustees, custodians and issuers (“IRA trustees”) can now accept late rollover contributions from individuals who self-certify they qualify for a waiver of the 60-day rollover requirement (Revenue Procedure 2016-47) if:
- individuals provide them with the Model Letter contained in Rev. Proc. 2016-47 (or a certification that is substantially similar in all material respects), and
- they don’t have actual knowledge contradicting the certification.
Plans and IRA trustees can rely on the self-certification only for the purpose of accepting a rollover that doesn’t meet the 60-day requirement and not as to whether the contribution satisfies other requirements for a valid rollover. Plans and IRA trustees may also provide the Model Letter to their clients seeking to self-certify a late rollover.
There are many requirements to make a valid rollover contribution, including the 60-day requirement – individuals have 60 days from the date they receive a distribution from a retirement plan or IRA to roll it over to another plan or IRA. Otherwise, the distribution may be taxable (other than qualified Roth distributions and any amounts already taxed), including a 10% additional tax on early distributions unless an exception applies. The IRS may waive the 60-day rollover requirement in certain situations (see FAQs: Waivers of the 60-Day Rollover Requirement).
Financial institutions that serve as IRA trustees or custodians might not have accepted late rollovers unless provided with an IRS ruling waiving the 60-day rollover requirement, or the automatic waiver rule applied. They may now, however, rely on an individual’s self-certification to accept late rollover contributions, unless they have actual knowledge contrary to the certification.