IRA One Rollover Per Year Rule Explained

IRA One-Rollover-Per-Year Rule ira handwritten in a notepad. Retirement.

If you are considering rolling over money from one IRA to another, it is important to be aware of the IRA one-rollover-per-year rule. Our guide offers tips for avoiding potential problems.

Presented by Tom Kennedy, CFP®:

The IRA one-rollover-per-year rule is a tax law that limits the number of times you can roll over money from one IRA to another in a given year. The rule was put in place to prevent people from using IRAs as a way to avoid paying taxes on investment gains.

What You Need to Know About the IRA One-Rollover-Per-Year Rule

Under the rule, you can only make one IRA rollover per year. This means that if you take a distribution from one IRA, you have 60 days to deposit it into another IRA. If you take another distribution from an IRA within that 60-day period, you will be taxed on the earnings from the first distribution. The regulation applies to rollovers on an aggregate basis, rather than on an account basis, regardless of how many IRAs you own—including SIMPLE, SEP, traditional, and Roth IRAs.

How the 12-month period is measured

The 12-month period is measured from the date the IRA owner receives the first distribution that will be rolled over to another IRA, not from the date the money is actually rolled over. (There is no limit on the number of trustee-to-trustee transfers or direct rollovers that can be completed within a 12-month period.)

Example: Mike has IRA #1 with a mutual fund company and IRA #2 with a brokerage firm. He receives a distribution of $7,500 from IRA #1 on January 15, 2023, and rolls the amount over within 60 days to IRA #2. If Mike receives another distribution from any IRA before January 16, 2024, then that amount would not be eligible for a 60-day rollover. However, if Mike wanted to request a trustee-to-trustee transfer between these two IRAs, that transaction would be permitted.

Exceptions to the IRA One-Rollover-Per-Year Rule

There are a few exceptions to the IRA one-rollover-per-year rule. For example, you can make multiple rollovers in a year if the distributions are:

  • Conversions from traditional IRAs to Roth IRAs
  • From an inherited IRA
  • From a qualified retirement plan (such as a 401(k) or 403(b))
  • To a designated beneficiary’s IRA
  • To a different IRA trustee or custodian

Here are some additional things to keep in mind about the IRA one-rollover-per-year rule:

  • The rule applies to all types of IRAs, including traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs.
  • The rule applies to indirect rollovers, which are rollovers that are made by taking a distribution from one IRA and depositing it into another IRA. Direct rollovers, which are rollovers that are made directly from one IRA trustee to another IRA trustee, are not subject to the rule.
  • The rule applies to all taxpayers, regardless of their income.

Avoiding the Once-Per-Year IRA Rollover Trap

There are certain best practices to follow before proceeding with a 60-day rollover distribution.

  • When moving identically registered IRAs between institutions, you should initiate a nonreportable trustee-to-trustee transfer with the receiving firm to ensure that tax documents are not issued for the transfer and that your one rollover for the 12-month period is not used.
  • Before requesting a rollover distribution, be sure that you have not previously completed a rollover under your social security number in the previous 12 months.
  • Do not attempt a 60-day rollover into an inherited IRA or BDA-IRA, as that is never permitted.

Consequences for Violating the Rules

Taxes and penalties may apply if you receive a distribution of previously untaxed dollars from an IRA.

  • You must include in gross income any previously untaxed amounts distributed from an IRA if you made an IRA-to-IRA rollover, and you may be subject to the 10 percent early withdrawal tax on the amount included in gross income.
  • You may also be subject to a 6 percent excise tax for any ineligible rollover amounts that have not been removed from the IRA. To avoid this excise tax, the ineligible amount must be removed with earnings by the tax filing deadline, plus applicable extensions, for the tax year in which the rollover was made.

If you have any questions about the IRA one-rollover-per-year rule, you should consult with a tax advisor.

Additional Information

For additional guidelines on moving retirement money or the IRS’s IRA One-Rollover-Per-Year Rule, please see the Rollovers of Retirement Plan and IRA Distributions resource on the IRS website.


Commonwealth Financial Network® does not provide tax or legal advice. Please contact your tax or legal professional regarding your individual situation. If you are considering rolling over money from an employer-sponsored plan, such as a 401(k) or 403(b), you may have the option of leaving the money in the current employer-sponsored plan or moving it into a new employer-sponsored plan. Benefits of leaving money in an employer-sponsored plan may include access to lower-cost institutional class shares; access to investment planning tools and other educational materials; the potential for penalty-free withdrawals starting at age 55; broader protection from creditors and legal judgments; and the ability to postpone required minimum distributions beyond age 72, under certain circumstances. This list of considerations is not exhaustive. Your decision whether or not to roll over your assets from an employer-sponsored plan into an IRA should be discussed with your financial advisor and your tax professional.

Tom Kennedy is a financial advisor located at Global Wealth Advisors 520 Post Oak., Suite 450, Houston, TX 77027. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial network®, Member FINRA  / SIPC, a Registered Investment Adviser. Financial planning services offered through Global Wealth Advisors are separate and unrelated to Commonwealth. He can be reached at (832) 649-8111 or at

© 2023 Commonwealth Financial Network®

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