The once-per-year IRA rollover rule sounds easy. However, there are many ways to go wrong. One common confusion with this rule occurs when there are multiple distributions or multiple deposits. These two circumstances have very different outcomes.

How the Once-Per-Year Rollover Rule Works

The once-per-year rollover rule says that an IRA owner cannot roll over an IRA distribution that is received within a 365-day period of a prior distribution that was rolled over. Traditional and Roth IRAs are combined for purposes of the once-per-year rule. So, for example, a distribution and subsequent rollover between your Roth IRAs will prevent another rollover of a distribution from your traditional IRA received within one year of the Roth IRA distribution. The bottom line is that an IRA-to-IRA (or Roth IRA-to-Roth IRA) 60-day rollover may not be done if you received a prior distribution within the last year (365 days) that you also rolled over.

The once-per-year rollover rule does NOT apply to rollovers between plans and IRAs or Roth IRA conversions.

One Distribution and Multiple Rollover Deposits

If an IRA owner takes a distribution, she may split the funds and roll them over to multiple IRAs. This could be done on different days and that would not be a problem. Multiple rollover deposits are acceptable for purposes of the once-per-year rollover rule because only one distribution is received even though there is more than one rollover deposit.

Example: Sophie receives a $100,000 distribution from her IRA on June 15. On June 20, Sophie rolls over $75,000 to an IRA. On June 25, she decides to roll over the remaining $25,000 to another IRA. This is not a violation of the once-per-year rollover rule because Sophie received only one distribution. Even though she did two deposits on two different dates to complete her rollover transaction, there are no issues with these transactions.

Multiple Distributions and One Rollover Deposit

If an IRA owner is permitted to take a distribution on one day and roll it over on multiple different days, is the opposite scenario also allowed? Can an IRA owner take multiple distributions on different days and deposit them at one time as one consolidated rollover? The answer is no. Even if all the distributions were taken from the same IRA, this is still not allowed. The reason is that only one distribution is eligible for rollover within a 60-day period.

Example: James takes a $2,000 distribution from his IRA on January 10 and another $30,000 distribution on January 12. His plan is to roll over both distributions on the same day to a new IRA. Unfortunately for James, only one of his IRA distributions is eligible for rollover. This is because the once-per-year rule limits him to rolling over only one distribution within a 365-day period.

Do Direct Transfers Between Your IRAs

Confusion about the impact of multiple deposits or distributions and the once-per-year rollover rule is just one of many reasons why 60-day rollovers should be avoided. If there is no 60-day rollover, then there is no once-per-year rollover rule to worry about. How, then, can you move your retirement funds? The best advice is to directly transfer the funds from one retirement account to another rather than taking a distribution payable to yourself and then rolling it over to another retirement account. You can do as many direct transfers between IRAs annually as you want.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

Qualified charitable distributions (QCDs) and required minimum distributions (RMDs) are two separate and distinct transactions. Here are some of the basics of each:

QCDs are only available to IRA owners and beneficiaries age 70½ or older. You cannot do a QCD from a 401(k) plan. The QCD limit for 2026 is $111,000. With a QCD, IRA funds are sent directly to a qualifying charity, and no goods or services can be received for the donation. Assuming all the rules are followed, the amount of the QCD is excluded from the IRA owner’s income. And since charities do not pay tax, the result is that no taxes are ever paid on the donated dollars.

RMDs are forced withdrawals from traditional IRAs (and from the pre-tax portion of a company retirement plan). When a person reaches a certain age (currently age 73), IRA RMDs must begin. The purpose of an RMD is to force a taxable distribution from what has been a tax-deferred pot of money. Congress allows IRA owners to shelter funds for decades. At age 73, it is time to pay the piper. Understandably, many IRA owners are not thrilled about forced withdrawals and a potentially elevated tax bill.

However, by combining the QCD and RMD rules, a person can satisfy their RMD, avoid any taxes due, and donate to charity all at the same time.

Where people get sideways with QCDs and RMDs is when it comes to timing. A common saying is, “Do your QCD before your RMD.” The purpose of this phrase is to ensure a person does not miss the opportunity to offset RMD income with a QCD. Once a normal (non-QCD) RMD is taken, that income cannot be offset with a future QCD. There is no such thing as a “prior-year” QCD or a “retroactive” QCD. If a person takes their RMD, those funds will be taxable.

But the “do your QCD before your RMD” axiom is misleading. If the goal is to offset all or a portion of an RMD, then the QCD and RMD are done simultaneously. We do not have two separate distributions. There is a single distribution that counts as both a QCD and RMD.

Example: Mike, age 75, has an IRA RMD of $10,000. If Mike’s RMD is distributed directly to him, then $10,000 will be included in his taxable income. Mike wants to avoid paying any tax on his RMD. So, he requests that his IRA custodian process a $10,000 QCD to Mike’s favorite charity. Upon the IRA custodian sending the check to the charity, Mike has killed two birds with one stone. Simultaneously, a QCD was completed, and Mike’s RMD was satisfied.

As mentioned, once a normal RMD is taken, a later QCD cannot offset the income from that earlier distribution. Yes, a person can do a QCD after satisfying their RMD, but that later QCD will just be an additional distribution over and above what was already distributed. Keep in mind that QCDs are not done “before” an RMD. When offsetting the income of an RMD with a QCD, a lone transaction simultaneously satisfies both the RMD as well as delivering funds to a charity as a QCD.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

QUESTION:

When someone under age 59½ uses the “backdoor” method of making Roth IRA contributions, does the 10% penalty apply to subsequent withdrawals if the IRA contribution was non-deductible?

Thank you,

John

ANSWER:

John,

The “backdoor Roth” contribution method involves making a non-deductible contribution to a traditional IRA, and then converting those dollars to a Roth IRA. Backdoor Roth IRA contributions are necessary for anyone with income that exceeds the annual Roth IRA contribution phase-out ranges. If the non-deductible dollars are then withdrawn from the Roth IRA after the conversion, there is no 10% early withdrawal penalty on those specific funds, regardless of a person’s age. However, any earnings on the non-deductible dollars would be subject to the penalty if they are received before the Roth IRA owner turns age 59½ (assuming no exception exists).

QUESTION:

Hello,

I am looking for some direction on how to title a beneficiary IRA. My mother passed away in March of this year at age 94, and my sister and I are 50/50 beneficiaries. The custodian wants to title the account as: “John R. Doe as beneficiary of Jane C. Doe IRA” (implying that Jane has died, rather than explicitly stating the fact). If I recall, the title should include “for the benefit of” and be something like: “Jane C. Doe deceased (3/28/2026) FBO John R. Doe, Beneficiary.” Please provide guidance on the proper title content and format.

Thank you and keep up the great work!

Jim

ANSWER:

Jim,

Sorry for the loss of your mother. As for the “proper” titling of an inherited IRA, there is no universally required method or set format. The deceased IRA owner’s name must remain on the account, and it must be clear that it is an inherited IRA. This is typically accomplished by using the words “beneficiary,” “beneficiary IRA” or “inherited IRA.” Both examples you provided are acceptable, although we prefer a title similar to what you suggested: “Jane C. Doe IRA (deceased 3/28/2026) F/B/O John R. Doe, Beneficiary.”

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

Contributions to Trump Accounts, the new tax-deferred savings vehicle for children, can’t be made until July 4, 2026. However, the opportunity to open a Trump Account, either through filing Form 4547 or using a dedicated IRS website, forms.trumpaccounts.gov, has been available for several months.

We have heard several reports that grandparents are establishing Trump Accounts for their grandchildren. While grandparents will be able to make contributions on behalf of grandchildren to Trump Accounts, IRS rules appear to strictly limit the circumstances where they can open up those accounts. Making matters worse, grandparents may be committing perjury without even knowing it when signing Form 4547 or using the website.

The IRS proposed regulations say there can only be one Trump Account per child, and the regulations set out two rules for who can establish those accounts. For grandparents, here’s the way the rules work:

• If the grandchild was born since January 1, 2025, a grandparent can only make an election to claim the $1,000 federal government contribution if the grandchild is a dependent of the grandparent’s. In that case, the grandparent can, at the same time as claiming the $1,000, also make an election to open up a Trump Account.
  
• In any other situation (for example, if the grandchild was born before January 1, 2025), there is a hierarchy as to who can legally open a Trump Account. A grandparent is last in line after a legal guardian, a parent, and an adult sibling. So, a grandparent can’t legally establish a Trump Account for a grandchild born before 2025 unless there is no legal guardian, parent or adult sibling “available” to do so. But neither the IRS regulations nor the Form 4547 instructions specify what not being “available” means. Does it mean deceased? Not legally responsible? Failing to act within a certain period? Something else?

According to the IRS regulations, by making this election, the grandparent must represent, under penalty of perjury, that he is authorized to open the Trump Account and that“there is no other person with a higher priority available to make the election.”The instructions to Form 4547 have similar language. However, the Form 4547 itself and the website only require a grandparent opening a Trump Account to declare, under penalty of perjury, that he has examined the form and “to the best of my knowledge and belief, it is true, correct, and complete.” There’s nothing on Form 4547 or the website warning the grandparent that, by making the election for a grandchild born before 2025, he is also representing to the IRS that no other person with a higher priority is “available” (whatever that means) to make the election. If it turns out that any of these other people are actually “available,” is the election invalid? Or worse, did the grandparent commit perjury by signing the form or completing the website election?

For these reasons, until we get much-needed guidance from the IRS, grandparents should be very careful before making an election to set up Trump Accounts through either Form 4547 or the IRS website. To reiterate: If the grandchild was born since January 1, 2025, the grandparent cannot make the election to claim the $1,000 federal government contribution and elect to open the Trump Account at the same time, unless the grandchild is a dependent of the grandparent’s. And if the grandchild was born before 2025 and has a parent (or legal guardian or adult sibling), the grandparent is not legally authorized to establish the account.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

Spring is here! Now is the time when many people spring-clean their homes. It is an opportunity to get organized, get rid of clutter, and simplify. This year, consider taking the same approach with your retirement savings.

Here are five steps you can take to tidy up your IRA and other retirement accounts this spring.

1. Roll over old employer plans. Things have changed. The era of working at one job for 50 years and getting a pension from that job upon retirement is long gone. Workers change jobs frequently. The result can be multiple retirement accounts. You may have several 401(k) plans still with old employers. Consider rolling 401(k) or other plan assets from old employers to an IRA to consolidate your retirement savings. You might also consider moving funds to your current employer’s plan if it accepts rollovers from other retirement accounts.

2. Consolidate your IRAs. Maybe you have multiple IRAs. While having multiple retirement accounts can sometimes serve a purpose, such as investment diversification, in many cases it can happen by accident. The result is more accounts to keep track of and more paperwork. Why not take the time to tidy up your IRAs?

3. Reevaluate your investments. You may have an IRA that you established years ago. At the time the investment lineup made sense, but does it now? It is always a good idea to reevaluate your investment strategy in terms of current market conditions. Why not tidy up by getting rid of old investments that are no longer working? You might even consider moving your IRA to a different custodian. If you do, keep in mind the best way to move your IRA money is to do a trustee-to-trustee transfer. This avoids all the complications that can come with a 60-day rollover.

4. Review your account information. Your retirement accounts produce a lot of paperwork. Tidy it up! Now is the time to get rid of old records you no longer need. While you’re at it, check the correspondence you are receiving. Is all the information accurate? Mistakes can happen and it is better to discover them sooner rather than later.

5. Update your beneficiary form. When you are tidying up your IRA or other retirement account, do not forget about your beneficiary form. You may have completed this form years ago and not given it another thought. Check it now. Does it still reflect your intent as to who will inherit your retirement assets? Many times, things change over the years. There are divorces, marriages, and births of children and grandchildren. Your beneficiary form should be updated to reflect all these changes.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

Question:

Hello,

I’ve run into someone who is retired, age 77, and therefore taking required minimum distributions (RMDs) from his Caterpillar 401(k) plan. He has approximately $5M in Caterpillar stock within the plan. It seems murky as to whether he would be eligible for the net unrealized appreciation (NUA) strategy. I have seen that taking RMDs will likely prevent eligibility for NUA treatment due to the lack of distribution of the entire balance in one taxable year. Any thoughts?

Thanks,

Derek

Answer:

Hi Derek,

Eligibility for the NUA strategy requires a triggering event and a lump sum distribution. A lump sum distribution means that the entire 401(k) account balance must be emptied all in one calendar year. The calendar year must be the same year in which the triggering event occurs or a later calendar year. After hitting a trigger, certain distributions (such as taking an RMD) require the entire remaining account balance to also be taken that same year, or else the trigger is lost and the NUA treatment is no longer available.

This person had a triggering event when he retired, so, if he started RMDs before 2026, then he would have needed to complete the lump sum distribution in that first RMD year. Failing to do that means the NUA strategy cannot be used.

Question:

Can a person, age 73, who is now required to take a traditional IRA RMD, still contribute to a Roth IRA if he is still working and has earned income?

Thank you,

Michael

Answer:

Hi Michael,

Yes, someone can make a Roth IRA contribution as long as he (or, if married, his spouse) has earned income at least as high as the contribution, and he meets the Roth IRA income limits. Taking RMDs from the traditional IRA does not affect eligibility for the Roth IRA contribution. However, the RMDs cannot count as earned income for Roth IRA contribution purposes.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

1. When did the decedent die? The SECURE Act impacts beneficiaries of decedents who died in 2020 or later. Anyone who passed away prior to 2020 falls under the old rules. Prior to the SECURE Act, all living, breathing beneficiaries were able to stretch annual required minimum distributions (RMDs) from their inherited IRA over their single life expectancy. For deaths in 2020 or later, the SECURE Act grandfathered certain beneficiaries under the old rules and introduced a 10-year rule for “non-eligible designated beneficiaries” (NEDBs). The year of death of the IRA owner must be identified so we know which path to take – old rules or new rules.

2. What was the date of birth (DOB) of the decedent? If the beneficiary is an NEDB, we must know the DOB of the decedent. Did he die before or after his required beginning date (RBD)? For IRAs, the RBD is April 1 of the year after the year a person turns age 73. For NEDBs, death before the RBD means no RMDs within the 10-year rule. Death on or after the RBD dictates that the beneficiary must take annual RMDs during the 10-year period.

3. Who (or what) is the beneficiary? Of course, we need to know who the beneficiary is. But is the beneficiary a person or a non-living entity like an estate? A non-living beneficiary means the 5-year rule applies for deaths before the RBD, and the “ghost rule” applies for deaths on or after the RBD. The type of beneficiary decides which direction we go.

4. What is the relationship between the decedent and beneficiary? This question is necessary to determine if the beneficiary is a spouse or a non-spouse. Spouse beneficiaries have a set of options available only to them – like a spousal rollover. Identifying whether the beneficiary is a spouse or not further narrows the path toward the proper payout.

5. What was the DOB of the beneficiary? Knowing the age of the beneficiary is crucial. For example, a spouse beneficiary under age 59½ could elect an inherited IRA to have penalty-free access to the inherited funds, and then do a spousal rollover at age 59½. For non-spouse beneficiaries, identifying the age of the beneficiary is just as important. Is this a minor child of the IRA owner? Is the beneficiary “not more than 10 years younger” than the decedent? Both would qualify the beneficiary as an eligible designated beneficiary (EDB) and allow for annual RMDs over the single life expectancy of that beneficiary (for a minor child, only up to age 31).

6. What type of IRA is this? Whether the IRA being passed to the beneficiary is a Roth or traditional matters. Roth IRA owners are always deemed to die prior to the RBD. That means there are never RMDs within the 10-year rule for Roth IRAs inherited by an NEDB. For non-person beneficiaries of Roth IRAs (like an estate), the 5-year rule will always apply.

By layering these six questions on top of each other, we can identify the applicable beneficiary payout structure. Yes, there are additional clarifying questions to help winnow down the final answer, but without answering these foundational questions, the correct path forward is impossible to determine. 

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

Trump Account contributions can be made as early as this July 4. But before making a contribution on behalf of a child, you should understand that the way these contributions are treated under federal tax law may be different than the way they are treated under state law.

As a reminder, four types of Trump Account contributions will be permitted:

(1) A one-time $1,000 federal government contribution for children born between 2025 and 2028;

(2) Individual contributions by parents, grandparents, or anyone else on behalf of a child, up to $5,000 in 2026;

(3) Contributions by employers for teenage employees and dependents of employees; and

(4) Contributions by tax-exempt organizations or any government.

For federal income tax purposes, Trump Account contributions in categories (1), (3) and (4) are considered pre-tax IRA contributions. This means that taxation of those contributions and their earnings can be deferred until distribution. Individual contributions (category (2)) are considered after-tax IRA contributions. Taxation of earnings is deferred until distribution.  

But that’s only half the story. There is also the question of how states will tax Trump Account contributions. Nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming) don’t have state income tax, so that isn’t an issue if you reside there. And, according to the Tax Foundation, 20 states and the District of Columbia broadly match federal tax law. Those 20 states are: Alabama, Colorado, Connecticut, Delaware, Illinois, Iowa, Kansas, Louisiana, Maryland, Missouri, Montana, Nebraska, New Mexico, New York, North Dakota, Oregon, Rhode Island, Utah, Vermont and West Virginia. Those states will likely tax Trump Account contributions like federal law does.

What about the remaining 21 states? According to a March 2, 2026 story by Julie Z. Weil of The Washington Post, they are handling Trump Account contributions in different ways:

• Three states (Arkansas, Idaho and Virginia) specifically say they will follow federal law.
• Georgia, Indiana and Maine have legislation pending to coordinate state law with federal law. (Although Vermont normally follows federal law, Ms. Weil reports that it also has pending legislation.)
• Three states (Minnesota, Mississippi and North Carolina) say they will take up the issue at a later date.
• Seven states (California, Hawaii, Kentucky, Massachusetts, Pennsylvania, South Carolina and Wisconsin) say they won’t recognize the federal tax treatment of Trump Accounts. In other words, they won’t treat Trump Accounts as IRAs. This means that earnings on all types of contributions will be taxed annually. (In California and possibly others of the seven states, contributions from employers and tax-exempt organizations will be taxed in the year made.)
• The remaining states did not respond to Ms. Weil.

If you live in one of the undecided states or a state that didn’t respond to the reporter, you should check with your state tax office.

Just because a state has said it won’t follow the federal tax treatment of Trump Account contributions doesn’t necessarily mean that a contribution is unwise. It just adds another factor that you must consider before pulling the trigger. Seeking help from a competent financial advisor is highly recommended.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

QUESTION:

Hi,

I was wondering if my Roth account that is a part of my Thrift Savings Plan (TSP) through federal employment counts toward my five-year rule for a Roth IRA? If I wanted to transfer the money from my workplace Roth account to a Roth IRA outside of my employment. Does the clock for the five-year rule start with my workplace Roth or with the Roth IRA I open separately?

Thank you!

Judy

ANSWER:

Hi Judy,

This is a good question and one we hear frequently. When it comes to tax-free distributions of qualified earnings, the Roth IRA will have its own five-year holding period. You do not get credit for the time the Roth plan account has been open. Instead, the clock for tax-free earnings starts with your first contribution or conversion to a Roth IRA. If you are looking to roll over the funds from your TSP to a Roth IRA, you may benefit by getting a jump-start on the five-year clock by doing a conversion or Roth IRA contribution as soon as you can.

QUESTION:

Hello!

I reached age 73 on February 9, 2026. I am still working and have a current 401(k) account. I don’t intend to retire, but plan to work for a couple of years, until I reach age 75.

I have a traditional IRA account. To avoid taking required minimum distributions (RMDs) from the IRA account, I am considering rolling over that account to my 401(k) account. Please let me know if I can do it and avoid RMDs. If that is fine, what is the deadline for the rollover from IRA to 401(k) plan?

Jay

ANSWER:

Hi Jay,

The rules do allow rollovers of pre-tax funds to employer plans. The rules also allow a delay for RMDs on funds in an employer plan if the “still-working” exception is available. There is no deadline for doing this rollover. However, because you reach age 73 in 2026, you must take your RMD for 2026 from your IRA prior to the rollover. The RMD is not eligible for rollover to the plan.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

Not all funds in an IRA belong there. When a contribution is not permitted in an IRA, it is considered an excess contribution and needs to be fixed to avoid penalties. Some excess contributions are easy to understand. Others may surprise you.

Here are some ways an excess IRA contribution can happen to you:

Your income is too high to make a Roth IRA contribution.

A common cause of excess Roth IRA contributions is contributing in a year when income is too high. If your income fluctuates or you have unexpected income in the year, you are particularly vulnerable. Watch out for the annual income limits. For traditional IRAs, there are no income limits for eligibility to contribute, so this is never a problem.

You do not have enough earned income or taxable compensation.

A more frequent occurrence is an IRA owner not having sufficient earned income or taxable compensation to fund an IRA contribution for the year. While you can use a spouse’s taxable compensation to fund your IRA, a multitude of different income sources do not qualify for an IRA contribution, including Social Security, rental income and investment income. You may have a high income, but still not be eligible to fund an IRA. If you go ahead anyway, the result is an excess IRA contribution.

You contribute more than the annual limit.

If you contribute more than the annual limit to an IRA for the year, that will be an excess contribution. This may seem like an easy rule to follow. You may wonder who is going around contributing tens of thousands of dollars to IRAs in violation of the contribution limits. In fact, most IRA custodians will not accept contributions over the yearly limit. However, an individual with multiple IRAs with different custodians could exceed the limit by contributing to each of them. 

You violate the 60-day or once-per-year rollover rule.

You may be surprised to know that a failed rollover attempt can result in an excess contribution. How can this happen? Well, there are a variety of ways you can end up in this position. One possibility would be a violation of one of the rollover rules. If you mistakenly roll over after the 60-day rollover period has already expired, or if you violate the once-per-year rollover rule, you will end up with an excess contribution instead of a rollover in your IRA.

You roll over your RMD.

If you are older, you may be at greater risk of excess contribution due to rollover mistakes. Older clients can be at a higher risk for excess contributions due to rollover mistakes. This is because of the rule that says that the required minimum distribution (RMD) for the year cannot be rolled over. In fact, the RMD for the IRA must be taken before any of the funds in the IRA are eligible for rollover. For example, an RMD must be taken before doing a Roth IRA conversion. If you mistakenly roll over your RMD, you will end up with an excess contribution.

You make a contribution to an inherited IRA.

If you inherit an IRA from someone who is not your spouse, you may not contribute to that inherited IRA or combine it with your own IRA. If you do, you will have an excess contribution.

The Fix for Excess Contributions

Now you know what can cause excess IRA contributions. That is the first step in avoiding them. If, despite your best efforts, an excess contribution occurs, the bad news is that the problem will not go away or fix itself. An excess contribution can be subject to penalties each year it remains in the IRA. The good news is that excess contributions can be corrected and often without penalty. For the right fix for your situation, be sure to talk to a knowledgeable tax or financial advisor.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.