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wchen2154
New Member

Does transferring money from one ROTH IRA to another ROTH IRA (closed the initial ROTH IRA account) count as a withdrawal?

 
2 Replies
dmertz
Level 15

Does transferring money from one ROTH IRA to another ROTH IRA (closed the initial ROTH IRA account) count as a withdrawal?

If a Roth IRA is moved to another Roth IRA by trustee-to-trustee transfer, where the money was never paid out to you as part of the process, it is not a reportable transaction.  It is neither a distribution (withdrawal) nor a rollover.

If the Roth IRA was moved by the money in the original Roth IRA being paid to you and you subsequently deposited the money into another Roth IRA within 60 days, it is a distribution (withdrawal) followed by a rollover contribution.  The distribution would be reported to you and the IRS on a Form 1099-R with code J, T or Q in box 7.

If the original account was instead a designated Roth account in a qualified retirement plan, commonly referred to as a Roth 401(k) , Roth 403(b) or Roth 457(b), a direct rollover would be reported on a Form 1099-R with code H in box 7.  If it was instead an indirect rollover, paid first to you and subsequently rolled over by you to a Roth IRA, the code would be 1B or 7B depending on your age.

In TurboTax, other than entering any Form 1099-R for this and indicating that it was rolled over, there are no other areas of TurboTax where you would have to enter this "withdrawal."

DanielV01
Expert Alumni

Does transferring money from one ROTH IRA to another ROTH IRA (closed the initial ROTH IRA account) count as a withdrawal?

Generally not as a withdrawal, but it may be reported as a distributionHowever, if the transfer is completed within a specified amount of time (usually 60 days), this type of movement is considered a rollover.  The transfer should be reported on a 1099-R (and therefore reported on your tax return), but box 7 should have a code H (if a direct rollover) or a code T (if a trustee-to-trustee rollover was not available) which will mean that the distribution (rollover) is not taxable.   Your box 2a should confirm this by showing 0 as the taxable amount of the distribution.

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