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gsangela
New Member

In the year that a beneficiary IRA is created (when I roll over my deceased relative's 401(k) into a new ira), am I ineligible for the savers credit?

Will this roll-over be considered a retirement distribution making me ineligible for the Retirement Savings Contribution Credit?

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Accepted Solutions
dmertz
Level 15

In the year that a beneficiary IRA is created (when I roll over my deceased relative's 401(k) into a new ira), am I ineligible for the savers credit?

No.

An IRA inherited by an non-spouse beneficiary can only be moved to an IRA for the benefit of the beneficiary by nonreportable trustee-to-trustee transfer, not by reportable distribution and rollover.  A non-spouse beneficiary is not permitted to roll over any distribution paid to the beneficiary.

Even if a non-spouse beneficiary receives a distribution from an inherited IRA, the distribution does not affect that individual's eligibility for a Retirement Savings Contributions Credit.  This distribution is not to be included when TurboTax asks if there were any distributions in the period from 2 years before the tax year through the due date of the tax return.

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1 Reply
dmertz
Level 15

In the year that a beneficiary IRA is created (when I roll over my deceased relative's 401(k) into a new ira), am I ineligible for the savers credit?

No.

An IRA inherited by an non-spouse beneficiary can only be moved to an IRA for the benefit of the beneficiary by nonreportable trustee-to-trustee transfer, not by reportable distribution and rollover.  A non-spouse beneficiary is not permitted to roll over any distribution paid to the beneficiary.

Even if a non-spouse beneficiary receives a distribution from an inherited IRA, the distribution does not affect that individual's eligibility for a Retirement Savings Contributions Credit.  This distribution is not to be included when TurboTax asks if there were any distributions in the period from 2 years before the tax year through the due date of the tax return.

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