ROLLOVER
- Requires Withdrawal from IRA to Solo 401k Plan
A check is made payable in the name of the individual not the name of the solo 401k plan.
The individual then deposits the check in his or her personal bank account.
A 1099-R is issued using reporting code 1 or 7 to report the rollover.
- 60 Day Rollover Rule
Funds must be redeposited in the same or another IRA or solo 401k plan within 60 days of receipt of funds withdrawn.
- Once Per Year Rollover
A rollover can only be done once per 12 months and applies to all IRAs in aggregate.
- Mandatory 20% Withholding
Applies to eligible rollover distributions from a plan such as former employer 401k (does not apply to distributions from IRAs).
Trustee-to-Trustee Transfer (Direct Transfer) to Solo 401k Plan
- No Withdrawal Required
A check is made payable in the name of the solo 401k plan for the benefit of the solo 401k owner.
The solo 401k owner then deposits the check directly into the solo 401k bank account.
A 1099-R is issued using code “G” to report the direct-transfer.
- No 60-Day Rollover Rule
Transfer is immediate
- Once Per Year Rollover Not Applicable
There can be an unlimited number of direct transfers.
- Mandatory 20% Withholding Not Applicable
Withholding never applies to plan direct transfers.
