401K Funds that Cannot Be Transferred / Rolled Over to a Solo 401k Plan

Distributions that may be rolled over to a solo 401k plan or ROBS 401k are referred to as “eligible rollover distributions.” 401(k) plan participants generally are eligible to roll over any portion of a QRP 401k distribution except for amounts that are:

  • required minimum distributions (RMDs);
  • distributions that are part of a series of substantially equal periodic payments (made over single or joint life expectancy or a specified period of 10 or more years);
  • hardship distributions;
  • returns of 401(k) elective deferrals because of the IRC Sec. 415 allocation limitations;
  • returns of excess contributions and excess aggregate contributions (i.e., ADP and ACP excesses) from a 401(k) or 401(m) plan;
  • returns of excess deferrals (i.e., amounts that exceed the annual 401(k) deferral limit);
  • plan loan amounts that are treated as distributions because of default or because they do not meet the IRC Sec. 72(p) requirements (however, certain loan amounts that are treated as part of a participant’s distribution upon termination of employment are considered eligible rollover distributions [Treas. Reg. 1.402(c)-2, Q&A 9]);
  • dividends paid on employer securities as described in IRC Sec. 404(k);
  • Premiums paid by the plan for the cost of current life or other insurance protection for participants; and
  • Permissible withdrawals from eligible automatic contribution arrangements (generally within 90 days of the first automatic contribution).

Compliance Note: While the regulations allow for the transfer of Roth 401k, Roth 403b and Roth 457b funds to a Roth solo 401k, the Roth IRA regulations do not allow for transfers to a Roth 401k including a Roth solo 401k. This is a Roth IRA restriction. VISIT HERE to learn more about this Roth IRA restriction.

For a list of retirement plans and IRAs that can be transferred to a solo 401k plan, CLICK HERE.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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