26 USC 408A - Roth IRAs

U.S Code last checked for updates: Nov 26, 2024

§ 408A.

Roth IRAs

(a)

General rule

(b)

Roth IRA

(c)

Treatment of contributions

(1)

No deduction allowed

(2)

Contribution limit

The aggregate amount of contributions for any taxable year to all Roth IRAs maintained for the benefit of an individual shall not exceed the excess (if any) of—

(A)

the maximum amount allowable as a deduction under section 219 with respect to such individual for such taxable year (computed without regard to subsection (g) of such section), over

(B)

the aggregate amount of contributions for such taxable year to all other individual retirement plans (other than Roth IRAs) maintained for the benefit of the individual.

(3)

Limits based on modified adjusted gross income

(A)

Dollar limit

The amount determined under paragraph (2) for any taxable year shall not exceed an amount equal to the amount determined under paragraph (2)(A) for such taxable year, reduced (but not below zero) by the amount which bears the same ratio to such amount as—

(i)

the excess of—

(I)

the taxpayer’s adjusted gross income for such taxable year, over

(II)

the applicable dollar amount, bears to

(ii)

$15,000 ($10,000 in the case of a joint return or a married individual filing a separate return).

The rules of subparagraphs (B) and (C) of section 219(g)(2) shall apply to any reduction under this subparagraph.

(B)

Definitions

For purposes of this paragraph—

(i)

adjusted gross income shall be determined in the same manner as under section 219(g)(3), except that any amount included in gross income under subsection (d)(3) shall not be taken into account, and

(ii)

the applicable dollar amount is—

(I)

in the case of a taxpayer filing a joint return, $150,000,

(II)

in the case of any other taxpayer (other than a married individual filing a separate return), $95,000, and

(III)

in the case of a married individual filing a separate return, zero.

(C)

Marital status

(D)

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2006, the dollar amounts in subclauses (I) and (II) of subparagraph (B)(ii) shall each be increased by an amount equal to—

(i)

such dollar amount, multiplied by

(ii)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2005” for “calendar year 2016” in subparagraph (A)(ii) thereof.

Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000.

(E)

Special rule for certain transfers from qualified tuition programs

The amount determined under subparagraph (A) shall be increased by the lesser of—

(i)

the amount of contributions described in section 529(c)(3)(E) for the taxable year, or

(ii)

the amount of the reduction determined under such subparagraph (determined without regard to this subparagraph).

(4)

Mandatory distribution rules not to apply before death

Notwithstanding subsections (a)(6) and (b)(3) of section 408 (relating to required distributions), the following provisions shall not apply to any Roth IRA:

(A)

Section 401(a)(9)(A).

(B)

The incidental death benefit requirements of section 401(a).

(5)

Rollover contributions

(A)

In general

(B)

Coordination with limit

(i)

In general

(ii)

Exception for rollovers from qualified tuition programs

(6)

Time when contributions made

(d)

Distribution rules

For purposes of this title—

(1)

Exclusion

(2)

Qualified distribution

For purposes of this subsection—

(A)

In general

The term “qualified distribution” means any payment or distribution—

(i)

made on or after the date on which the individual attains age 59½,

(ii)

made to a beneficiary (or to the estate of the individual) on or after the death of the individual,

(iii)

attributable to the individual’s being disabled (within the meaning of section 72(m)(7)), or

(iv)

which is a qualified special purpose distribution.

(B)

Distributions within nonexclusion period

(C)

Distributions of excess contributions and earnings

(3)

Rollovers from an eligible retirement plan other than a Roth IRA

(A)

In general

Notwithstanding sections 402(c), 403(b)(8), 408(d)(3), and 457(e)(16), in the case of any distribution to which this paragraph applies—

(i)

there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution,

(ii)

section 72(t) shall not apply, and

(iii)

unless the taxpayer elects not to have this clause apply, any amount required to be included in gross income for any taxable year beginning in 2010 by reason of this paragraph shall be so included ratably over the 2-taxable-year period beginning with the first taxable year beginning in 2011.

Any election under clause (iii) for any distributions during a taxable year may not be changed after the due date for such taxable year.

(B)

Distributions to which paragraph applies

(C)

Conversions

(D)

Additional reporting requirements

(E)

Special rules for contributions to which 2-year averaging applies

In the case of a qualified rollover contribution to a Roth IRA of a distribution to which subparagraph (A)(iii) applied, the following rules shall apply:

(i)

Acceleration of inclusion

(I)

In general

(II)

Limitation on aggregate amount included

(ii)

Death of distributee

(I)

In general

(II)

Special rule for surviving spouse

(F)

Special rule for applying section 72

(i)

In general

If—

(I)

any portion of a distribution from a Roth IRA is properly allocable to a qualified rollover contribution described in this paragraph; and

(II)

such distribution is made within the 5-taxable year period beginning with the taxable year in which such contribution was made,

then section 72(t) shall be applied as if such portion were includible in gross income.

(ii)

Limitation

(4)

Aggregation and ordering rules

(A)

Aggregation rules

(B)

Ordering rules

For purposes of applying this section and section 72 to any distribution from a Roth IRA, such distribution shall be treated as made—

(i)

from contributions to the extent that the amount of such distribution, when added to all previous distributions from the Roth IRA, does not exceed the aggregate contributions to the Roth IRA; and

(ii)

from such contributions in the following order:

(I)

Contributions other than qualified rollover contributions to which paragraph (3) applies.

(II)

Qualified rollover contributions to which paragraph (3) applies on a first-in, first-out basis.

Any distribution allocated to a qualified rollover contribution under clause (ii)(II) shall be allocated first to the portion of such contribution required to be included in gross income.

(5)

Qualified special purpose distribution

(6)

Taxpayer may make adjustments before due date

(A)

In general

(B)

Special rules

(i)

Transfer of earnings

(ii)

No deduction

(iii)

Conversions

(7)

Due date

(e)

Qualified rollover contribution

For purposes of this section—

(1)

In general

The term “qualified rollover contribution” means a rollover contribution—

(A)

to a Roth IRA from another such account,

(B)

from an eligible retirement plan, but only if—

(i)

in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408(d)(3), and

(ii)

in the case of any eligible retirement plan (as defined in section 402(c)(8)(B) other than clauses (i) and (ii) thereof), such rollover contribution meets the requirements of section 402(c), 403(b)(8), or 457(e)(16), as applicable, and

“(C)

(2)

Military death gratuity

(A)

In general

The term “qualified rollover contribution” includes a contribution to a Roth IRA maintained for the benefit of an individual made before the end of the 1-year period beginning on the date on which such individual receives an amount under section 1477 of title 10, United States Code, or section 1967 of title 38 of such Code, with respect to a person, to the extent that such contribution does not exceed—

(i)

the sum of the amounts received during such period by such individual under such sections with respect to such person, reduced by

(ii)

the amounts so received which were contributed to a Coverdell education savings account under section 530(d)(9).

(B)

Annual limit on number of rollovers not to apply

(C)

Application of section 72

(3)

Simple retirement accounts

(Added Pub. L. 105–34, title III, § 302(a), Aug. 5, 1997, 111 Stat. 825; amended Pub. L. 105–206, title VI, § 6005(b)(1)–(7), (9), title VII, § 7004(a), July 22, 1998, 112 Stat. 796–800, 833; Pub. L. 105–277, div. J, title IV, § 4002(j), Oct. 21, 1998, 112 Stat. 2681–908; Pub. L. 107–16, title VI, § 617(e)(1), June 7, 2001, 115 Stat. 106; Pub. L. 109–222, title V, § 512(a), (b), May 17, 2006, 120 Stat. 365; Pub. L. 109–280, title VIII, §§ 824(a), (b), 833(c), Aug. 17, 2006, 120 Stat. 998, 1004; Pub. L. 110–245, title I, § 109(a), (b), June 17, 2008, 122 Stat. 1631, 1632; Pub. L. 110–458, title I, § 108(d), (h), Dec. 23, 2008, 122 Stat. 5109; Pub. L. 115–97, title I, §§ 11002(d)(1)(W), 13611(a), Dec. 22, 2017, 131 Stat. 2060, 2165; Pub. L. 115–141, div. U, title IV, § 401(a)(77), (78), Mar. 23, 2018, 132 Stat. 1187; Pub. L. 116–94, div. O, title I, § 107(c), Dec. 20, 2019, 133 Stat. 3149; Pub. L. 117–328, div. T, title I, § 126(b), title IV, § 401(b)(5), title VI, § 601(a), (c)(2), (d), Dec. 29, 2022, 136 Stat. 5316, 5388, 5390.)

cite as: 26 USC 408A