The Consolidated Appropriations Act of 2016 changed the rules for SIMPLE IRAs. This new act permits rollovers of distributions from Traditional IRAs (not Roth IRAs) and employer sponsored retirement plans (including solo 401k plans), 403(b), and governmental section 457(b) plans into SIMPLE IRAs after the expiration of the two-year period that begins on the date the employee first participated in the employer’s SIMPLE IRA plan. This new rule went into effect after December 18, 2015. Before this new rule was promulgated, distributions from employer-sponsored retirement plans and Traditional IRAs could be rolled over to SIMPLE IRAs.
Before satisfying the two-year period (during which distributions from a SIMPLE IRA also are subject to an additional 25 percent early distribution penalty tax), only distributions from a SIMPLE IRA may be rolled over to a SIMPLE IRAs.
