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Internal Revenue Code, § 408A. Roth IRAs

I.R.C. § 408A(a) General Rule
Except as provided in this section, a Roth IRA shall be treated for purposes of this title in the same manner as an individual retirement plan.
I.R.C. § 408A(b) Roth IRA
For purposes of this title, the term “Roth IRA” means an individual retirement plan (as defined in section 7701(a)(37)) which is designated (in such manner as the Secretary may prescribe) at the time of establishment of the plan as a Roth IRA. Such designation shall be made in such manner as the Secretary may prescribe.
I.R.C. § 408A(c) Treatment Of Contributions
I.R.C. § 408A(c)(1) No Deduction Allowed
No deduction shall be allowed under section 219 for a contribution to a Roth IRA.
I.R.C. § 408A(c)(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—
I.R.C. § 408A(c)(2)(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 (d)(1) or (g) of such section), over
I.R.C. § 408A(c)(2)(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.
I.R.C. § 408A(c)(3) Limits Based On Modified Adjusted Gross Income
I.R.C. § 408A(c)(3)(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.R.C. § 408A(c)(3)(A)(i)
the excess of—
I.R.C. § 408A(c)(3)(A)(i)(I)
the taxpayer's adjusted gross income for such taxable year, over
I.R.C. § 408A(c)(3)(A)(i)(II)
the applicable dollar amount, bears to
I.R.C. § 408A(c)(3)(A)(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.
I.R.C. § 408A(c)(3)(B) Definitions
For purposes of this paragraph—
I.R.C. § 408A(c)(3)(B)(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
I.R.C. § 408A(c)(3)(B)(ii)
the applicable dollar amount is—
I.R.C. § 408A(c)(3)(B)(ii)(I)
in the case of a taxpayer filing a joint return, $150,000,
I.R.C. § 408A(c)(3)(B)(ii)(II)
in the case of any other taxpayer (other than a married individual filing a separate return), $95,000, and
I.R.C. § 408A(c)(3)(B)(ii)(III)
in the case of a married individual filing a separate return, zero.
I.R.C. § 408A(c)(3)(C) Marital Status
Section 219(g)(4) shall apply for purposes of this paragraph.
I.R.C. § 408A(c)(3)(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.R.C. § 408A(c)(3)(D)(i)
such dollar amount, multiplied by
I.R.C. § 408A(c)(3)(D)(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.
I.R.C. § 408A(c)(4) Contributions Permitted After Age 70 1/2
Contributions to a Roth IRA may be made even after the individual for whom the account is maintained has attained age 70 1/2.
I.R.C. § 408A(c)(5) 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:
I.R.C. § 408A(c)(5)(B)
The incidental death benefit requirements of section 401(a).
I.R.C. § 408A(c)(6) Rollover Contributions
I.R.C. § 408A(c)(6)(A) In General
No rollover contribution may be made to a Roth IRA unless it is a qualified rollover contribution.
I.R.C. § 408A(c)(6)(B) Coordination With Limit
A qualified rollover contribution shall not be taken into account for purposes of paragraph (2).
I.R.C. § 408A(c)(7) Time When Contributions Made
For purposes of this section, the rule of section 219(f)(3) shall apply.
I.R.C. § 408A(d) Distribution Rules
For purposes of this title—
I.R.C. § 408A(d)(1) Exclusion
Any qualified distribution from a Roth IRA shall not be includible in gross income.
I.R.C. § 408A(d)(2) Qualified Distribution
For purposes of this subsection—
I.R.C. § 408A(d)(2)(A) In General
The term “qualified distribution” means any payment or distribution—
I.R.C. § 408A(d)(2)(A)(i)
made on or after the date on which the individual attains age 59 1/2,
I.R.C. § 408A(d)(2)(A)(ii)
made to a beneficiary (or to the estate of the individual) on or after the death of the individual,
I.R.C. § 408A(d)(2)(A)(iii)
attributable to the individual's being disabled (within the meaning of section 72(m)(7)), or
I.R.C. § 408A(d)(2)(A)(iv)
which is a qualified special purpose distribution.
I.R.C. § 408A(d)(2)(B) Distributions Within Nonexclusion Period
A payment or distribution from a Roth IRA shall not be treated as a qualified distribution under subparagraph (A) if such payment or distribution is made within the 5-taxable year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA (or such individual's spouse made a contribution to a Roth IRA) established for such individual.
I.R.C. § 408A(d)(2)(C) Distributions Of Excess Contributions And Earnings
The term “qualified distribution” shall not include any distribution of any contribution described in section 408(d)(4) and any net income allocable to the contribution.
I.R.C. § 408A(d)(3) Rollovers From An Eligible Retirement Plan Other Than A Roth IRA
I.R.C. § 408A(d)(3)(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.R.C. § 408A(d)(3)(A)(i)
there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution,
I.R.C. § 408A(d)(3)(A)(ii)
section 72(t) shall not apply, and
I.R.C. § 408A(d)(3)(A)(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.
I.R.C. § 408A(d)(3)(B) Distributions To Which Paragraph Applies
This paragraph shall apply to a distribution from an eligible retirement plan (as defined by section 402(c)(8)(B)) maintained for the benefit of an individual which is contributed to a Roth IRA maintained for the benefit of such individual in a qualified rollover contribution. This paragraph shall not apply to a distribution which is a qualified rollover contribution from a Roth IRA or a qualified rollover contribution from a designated Roth account which is a rollover contribution described in section 402A(c)(3)(A).
I.R.C. § 408A(d)(3)(C) Conversions
The conversion of an individual retirement plan (other than a Roth IRA) to a Roth IRA shall be treated for purposes of this paragraph as a distribution to which this paragraph applies.
I.R.C. § 408A(d)(3)(D) Additional Reporting Requirements
Trustees of Roth IRAs, trustees of individual retirement plans, persons subject to section 6047(d)(1), or all of the foregoing persons, whichever is appropriate, shall include such additional information in reports required under section 408(i) or 6047 as the Secretary may require to ensure that amounts required to be included in gross income under subparagraph (A) are so included.
I.R.C. § 408A(d)(3)(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.R.C. § 408A(d)(3)(E)(i) Acceleration Of Inclusion
I.R.C. § 408A(d)(3)(E)(i)(I) In General
The amount otherwise required to be included in gross income for any taxable year beginning in 2010 or the first taxable year in the 2-year period under subparagraph (A)(iii) shall be increased by the aggregate distributions from Roth IRAs for such taxable year which are allocable under paragraph (4) to the portion of such qualified rollover contribution required to be included in gross income under subparagraph (A)(i).
I.R.C. § 408A(d)(3)(E)(i)(II) Limitation On Aggregate Amount Included
The amount required to be included in gross income for any taxable year under subparagraph (A)(iii) shall not exceed the aggregate amount required to be included in gross income under subparagraph (A)(iii) for all taxable years in the 2-year period (without regard to subclause (I)) reduced by amounts included for all preceding taxable years.
I.R.C. § 408A(d)(3)(E)(ii) Death Of Distributee
I.R.C. § 408A(d)(3)(E)(ii)(I) In General
If the individual required to include amounts in gross income under such subparagraph dies before all of such amounts are included, all remaining amounts shall be included in gross income for the taxable year which includes the date of death.
I.R.C. § 408A(d)(3)(E)(ii)(II) Special Rule For Surviving Spouse
If the spouse of the individual described in subclause (I) acquires the individual's entire interest in any Roth IRA to which such qualified rollover contribution is properly allocable, the spouse may elect to treat the remaining amounts described in subclause (I) as includible in the spouse's gross income in the taxable years of the spouse ending with or within the taxable years of such individual in which such amounts would otherwise have been includible. Any such election may not be made or changed after the due date for the spouse's taxable year which includes the date of death.
I.R.C. § 408A(d)(3)(F) Special Rule For Applying Section 72
I.R.C. § 408A(d)(3)(F)(i) In General
If—
I.R.C. § 408A(d)(3)(F)(i)(I)
any portion of a distribution from a Roth IRA is properly allocable to a qualified rollover contribution described in this paragraph; and
I.R.C. § 408A(d)(3)(F)(i)(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.
I.R.C. § 408A(d)(3)(F)(ii) Limitation
Clause (i) shall apply only to the extent of the amount of the qualified rollover contribution includible in gross income under subparagraph (A)(i).
I.R.C. § 408A(d)(4) Aggregation And Ordering Rules
I.R.C. § 408A(d)(4)(A) Aggregation Rules
Section 408(d)(2) shall be applied separately with respect to Roth IRAs and other individual retirement plans.
I.R.C. § 408A(d)(4)(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.R.C. § 408A(d)(4)(B)(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
I.R.C. § 408A(d)(4)(B)(ii)
from such contributions in the following order:
I.R.C. § 408A(d)(4)(B)(ii)(I)
Contributions other than qualified rollover contributions to which paragraph (3) applies.
I.R.C. § 408A(d)(4)(B)(ii)(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.
I.R.C. § 408A(d)(5) Qualified Special Purpose Distribution
For purposes of this section, the term “qualified special purpose distribution” means any distribution to which subparagraph (F) of section 72(t)(2) applies.
I.R.C. § 408A(d)(6) Taxpayer May Make Adjustments Before Due Date
I.R.C. § 408A(d)(6)(A) In General
Except as provided by the Secretary, if, on or before the due date for any taxable year, a taxpayer transfers in a trustee-to-trustee transfer any contribution to an individual retirement plan made during such taxable year from such plan to any other individual retirement plan, then, for purposes of this chapter, such contribution shall be treated as having been made to the transferee plan (and not the transferor plan).
I.R.C. § 408A(d)(6)(B) Special Rules
I.R.C. § 408A(d)(6)(B)(i) Transfer Of Earnings
Subparagraph (A) shall not apply to the transfer of any contribution unless such transfer is accompanied by any net income allocable to such contribution.
I.R.C. § 408A(d)(6)(B)(ii) No Deduction
Subparagraph (A) shall apply to the transfer of any contribution only to the extent no deduction was allowed with respect to the contribution to the transferor plan.
I.R.C. § 408A(d)(6)(B)(iii) Conversions
Subparagraph (A) shall not apply in the case of a qualified rollover contribution to which subsection (d)(3) applies (including by reason of subparagraph (C) thereof).
I.R.C. § 408A(d)(7) Due Date
For purposes of this subsection, the due date for any taxable year is the date prescribed by law (including extensions of time) for filing the taxpayer's return for such taxable year.
I.R.C. § 408A(e) Qualified Rollover Contribution
For purposes of this section—
I.R.C. § 408A(e)(1) In General
The term “qualified rollover contribution” means a rollover contribution—
I.R.C. § 408A(e)(1)(A)
to a Roth IRA from another such account,
I.R.C. § 408A(e)(1)(B)
from an eligible retirement plan, but only if—
I.R.C. § 408A(e)(1)(B)(i)
in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408(d)(3), and
I.R.C. § 408A(e)(1)(B)(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.
For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.
I.R.C. § 408A(e)(2) Military Death Gratuity
I.R.C. § 408A(e)(2)(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.R.C. § 408A(e)(2)(A)(i)
the sum of the amounts received during such period by such individual under such sections with respect to such person, reduced by
I.R.C. § 408A(e)(2)(A)(ii)
the amounts so received which were contributed to a Coverdell education savings account under section 530(d)(9).
I.R.C. § 408A(e)(2)(B) Annual Limit on Number Of Rollovers Not To Apply
Section 408(d)(3)(B) shall not apply with respect to amounts treated as a rollover by subparagraph (A).
I.R.C. § 408A(e)(2)(C) Application Of Section 72
For purposes of applying section 72 in the case of a distribution which is not a qualified distribution, the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.
I.R.C. § 408A(f) Individual Retirement Plan
For purposes of this section—
I.R.C. § 408A(f)(1)
a simplified employee pension or a simple retirement account may not be designated as a Roth IRA; and
I.R.C. § 408A(f)(2)
contributions to any such pension or account shall not be taken into account for purposes of subsection (c)(2)(B).
(Added Pub. L. 105-34, title III, Sec. 302(a), Aug. 5, 1997, 111 Stat 788; amended Pub. L. 105-206, title VI, Sec. 6005(b), title VII, Sec. 7004, July 22, 1998, 112 Stat 685; Pub. L. 105-277, title IV, Sec. 4002(j), Oct. 21, 1998, 112 Stat. 2681; Pub. L. 107-16, title VI, Sec. 617(e), June 7, 2001, 115 Stat. 38; Pub. L. 109-222, title V, Sec. 512, May 17, 2006, 120 Stat. 345; Pub. L. 109-280, title VIII, Sec. 824, 833, Aug. 17, 2006, 120 Stat. 780; Pub. L. 110-245, Sec. 109, June 17, 2008, 122 Stat. 1624; Pub. L. 110-458, title I, Sec. 108(d), (h), Dec. 23, 2008, 122 Stat. 5092; Pub. L. 115-97, title I, Sec. 11002(d)(1)(W), 13611(a), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(77)-(78), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subsec. (d)(3)(B). Pub. L. 115-141, Div. U, Sec. 401(a)(77), amended subar. (B), by adding a period at the end.
Subsec. (e)(2)(B). Pub. L. 115-141, Div. U, Sec. 401(a)(78), amended subar. (B), by substituting ‘‘subparagraph (A)’’ for ‘‘the subparagraph (A)’’.
2017 -- Subsec. (c)(3)(D)(ii). Pub. L. 115-97, title I, Sec. 11002(d)(1)(W), amended clause (ii) by substituting “for ‘calendar year 2016’ in subparagraph (A)(ii)” for ‘‘for ‘calendar year 1992’ in subparagraph (B)’’.
Subsec. (d)(6)(B)(iii). Pub. L. 115-97, title I, Sec. 13611(a), amended subpar. (B) by adding clause (iii).
2008--Subsec. (c)(3)(B). Pub. L. 110-458, Sec. 108(d)(1), amended subpar. (B) by striking the second “an” before “eligible”; by striking “other than a Roth IRA”; and by adding a flush sentence at the end.
Subsec. (c)(3)(C). Pub. L. 110-458, Sec. 108(h)(1), amended par. (3) by redesignating subpar. (C), as added by Pub. L. 109-280, Sec. 833(c), as subpar. (E).
Subsec. (c)(3)(E). Pub. L. 110-458, Sec. 108(h)(2), redesignated subpar. (E) (as redesignated by Pub. L. 110-458, Sec. 108(h)(1)) as subpar. (D), and substituted “subparagraph (B)(ii)” for “subparagraph (C)(ii)”, effective for taxable years beginning after December 31, 2009.
Subsec. (d)(3)(B). Pub. L. 110-458, Sec. 108(d)(2), amended subpar. (B) (as in effect after amendment by Pub. L. 109-280, Sec. 824(b)(2)(B)) by striking “(other than a Roth IRA)” and by adding a new sentence at the end.
Subsec. (e). Pub. L. 110-245, Sec. 109(b), amended subsec. (e), as in effect after amendment by Pub. L. 109-280, Sec. 824(a). Before being amended by Pub. L. 110-245, it read as follows:
“(e) Qualified Rollover Contribution— For purposes of this section, the term “qualified rollover contribution" means a rollover contribution--
“(1) to a Roth IRA from another such account,
“(2) from an eligible retirement plan, but only if--
“(A) in the case of an individual retirement plan, such rollover contribution meets the requirements of section 408(d)(3), and
“(B) 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.
“For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.”
Subsec. (e). Pub. L. 110-245, Sec. 109(a), amended subsec. (e) as it was in effect before being amended by Pub. L. 109-280, Sec. 824(a).
(e) Qualified Rollover Contribution.—For purposes of this section, the term ‘qualified rollover contribution’ means a rollover contribution to a Roth IRA from another such account, or from an individual retirement plan, but only if such rollover contribution meets the requirements of section 408(d)(3). Such term includes a rollover contribution described in section 402A(c)(3)(A). For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.
2006 - Subsec. (c)(3)(B). Pub. L. 109-280, Sec. 824(b)(1), amended subpar. (B) (as in effect before amendment by Pub. L. 109-222) by substituting “an eligible retirement plan (as defined by section 403(c)(8)(B))” for “individual retirement plan” and by substituting “Eligible Retirement Plan” for “IRA” in the heading in the first place it appears.
Subsec. (c)(3)(C). Pub. L. 109-280, Sec. 833(c), added subpar. (C). Note that a subpar. (C) already exists.
Subsec. (d)(3). Pub. L. 109-280, Sec. 824(b)(2)(E), amended the heading of par. (3) by substituting “Eligible Retirement Plan” for “IRA” the first place it appeared.
Subsec. (d)(3)(A). Pub. L. 109-280, Sec. 824(b)(2)(A), amended subpar. (A) by substituting “sections 402(c), 403(b)(8), 408(d)(3), and 457(e)(16)” for “section 408(d)(3)”.
Subsec. (d)(3)(B). Pub. L. 109-280, Sec. 824(b)(2)(B), amended subpar. (B) by substituting “eligible retirement plan (as defined by section 402(c)(8)(B))” for “individual retirement plan”.
Subsec. (d)(3)(D). Pub. L. 109-280, Sec. 824(b)(2)(C)-(D), amended subpar. (D) by inserting “or 6047” after “408(i)” and by substituting “persons subject to section 6047(d)(1), or all of the foregoing persons" for “or both”.
Subsec. (e). Pub. L. 109-280, Sec. 824(a), amended subsec. (e). Before amendment, it read as follows:
“(e) Qualified Rollover Contribution.--
“For purposes of this section, the term ‘qualified rollover contribution’ means a rollover contribution to a Roth IRA from another such account, or from an individual retirement plan, but only if such rollover contribution meets the requirements of section 408(d)(3). Such term includes a rollover contribution described in section 402A(c)(3)(A). For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth IRA.”
Subsec. (c)(3)(B)-(D). Pub. L. 109-222, Sec. 512(a)(1), struck subpar. (B) and redesignated subpar. (C) and (D) as subpar. (B) and (C), respectively. Before being struck, subpar. (B) read as follows:
“(B) Rollover from IRA.--
“A taxpayer shall not be allowed to make a qualified rollover contribution to a Roth IRA from an individual retirement plan other than a Roth IRA during any taxable year if, for the taxable year of the distribution to which such contribution relates--
“(i) the taxpayer's adjusted gross income exceeds $100,000, or
“(ii)the taxpayer is a married individual filing a separate return.”
Subsec. (c)(3)(B)(i). Pub. L. 109-222, Sec. 512(a)(2), amended clause (i) by substituting “except that any amount included in gross income under subsection (d)(3) shall not be taken into account, and” for “except that--
“(I) any amount included in gross income under subsection (d)(3) shall not be taken into account, and
“(II) any amount included in gross income by reason of a required distribution under a provision described in paragraph (5) shall not be taken into account for purposes of subparagraph (B)(i), and”.
Subsec. (d)(3)(A)(iii). Pub. L. 109-222, Sec. 512(b)(1), amended clause (iii). Before amendment, it read as follows:
“(iii) unless the taxpayer elects not to have this clause apply for any taxable year, any amount required to be included in gross income for such taxable year by reason of this paragraph for any distribution before January 1, 1999, shall be so included ratably over the 4-taxable year period beginning with such taxable year.”
Subsec. (d)(3)(E). Pub. L. 109-222, Sec. 512(b)(2), amended subpar. (E) by substituting “2-year” for “4-year” in the heading and by amending clause (i). Before amendment, clause (i) read as follows:
“(i) Acceleration of inclusion. --
“(I) In general. --
“The amount required to be included in gross income for each of the first 3 taxable years in the 4-year period under subparagraph (A)(iii) shall be increased by the aggregate distributions from Roth IRAs for such taxable year which are allocable under paragraph (4) to the portion of such qualified rollover contribution required to be included in gross income under subparagraph (A)(i).
“(II) Limitation on aggregate amount included. --
“The amount required to be included in gross income for any taxable year under subparagraph (A)(iii) shall not exceed the aggregate amount required to be included in gross income under subparagraph (A)(iii) for all taxable years in the 4-year period (without regard to subclause (I)) reduced by amounts included for all preceding taxable years.”
2001 - Subsec. (e). Pub. L. 107-16, Sec. 417(e)(1), amended subsec. (e) by adding a sentence after the first sentence.
1998 - Subsec. (c)(3)(C)(i)(II). Pub. L. 105-277, Sec. 4002(j), amended subclause (II) by substituting “, and” for the period at the end.
Subsec. (c)(3)(A). Pub. L. 105-206, Sec. 6005(b)(1), amended subpar. (A) by substituting “shall not exceed an amount equal to the amount determined under paragraph (2)(A) for such taxable year, reduced” for “shall be reduced”.
Subsec. (c)(3)(A)(ii). Pub. L. 105-206, Sec. 6005(b)(2)(A), amended subpar. (A) by inserting “or a married individual filing a separate return” after “joint return”.
Subsec. (c)(3)(B). Pub. L. 105-206, Sec. 6005(b)(2)(B), amended subpar. (B) by inserting “, for the taxable year of the distribution to which such contribution relates” after “if” and by striking “for such taxable year” after “gross income” in clause (i).
Subsec. (c)(3)(C)(i). Pub. L. 105-206, Sec. 6005(b)(2)(C), amended clause (i) by striking “and the deduction under section 219 shall be taken into account” after “taken into account”.
Subsec. (c)(3)(C)(i). Pub. L. 105-206, Sec. 7004(a), amended clause (i), effective for taxable years beginning after 2004. Prior to amendment it read as follows:
“(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”
Subsec. (d)(1). Pub. L. 105-206, Sec. 6005(b)(5)(B), amended par. (1). Prior to amendment it read as follows:
“(1) General rules.--
“(A) Exclusions from gross income.--
Any qualified distribution from a Roth IRA shall not be includible in gross income.
“(B) Nonqualified distributions.--
In applying section 72 to any distribution from a Roth IRA which is not a qualified distribution, such distribution shall be treated as made from contributions to the Roth IRA to the extent that such distribution, when added to all previous distributions from the Roth IRA, does not exceed the aggregate amount of contributions to the Roth IRA.”
Subsec. (d)(2)(B). Pub. L. 105-206, Sec. 6005(b)(3)(A), amended subpar. (B). Prior to amendment it read as follows:
“(B) Certain distributions within 5 years.--
A payment or distribution shall not be treated as a qualified distribution under subparagraph (A) if--
“(i) it is made within the 5-taxable year period beginning with the 1st taxable year for which the individual made a contribution to a Roth IRA (or such individual's spouse made a contribution to a Roth IRA) established for such individual, or
“(ii) in the case of a payment or distribution properly allocable (as determined in the manner prescribed by the Secretary) to a qualified rollover contribution from an individual retirement plan other than a Roth IRA (or income allocable thereto), it is made within the 5-taxable year period beginning with the taxable year in which the rollover contribution was made.”
Subsec. (d)(2)(C). Pub. L. 105-206, Sec. 6005(b)(3)(B), added subpar. (C).
Subsec. (d)(3)(A)(iii). Pub. L. 105-206, Sec. 6005(b)(4)(A), amended clause (iii). Prior to amendment it read as follows:
“(iii) in the case of a distribution before January 1, 1999, any amount required to be included in gross income by reason of this paragraph shall be so included ratably over the 4-taxable year period beginning with the taxable year in which the payment or distribution is made.”
Subsec. (d)(3). Pub. L. 105-206, Sec. 6005(b), amended par.(3) by striking subpar. (D); by redesignating subpar. (E) as subpar. (D); by adding subpars. (F) and (G) and redesignating them as subpars. (E) and (F), respectively. Prior to being striken, subpar. (D) read as follows:
“(D) Conversion of excess contributions.--
If, no later than the due date for filing the return of tax for any taxable year (without regard to extensions), an individual transfers, from an individual retirement plan (other than a Roth IRA), contributions for such taxable year (and any earnings allocable thereto) to a Roth IRA, no such amount shall be includible in gross income to the extent no deduction was allowed with respect to such amount.”
Subsec. (d)(4). Pub. L. 105-206, Sec. 6005(b)(5)(A), amended par. (4). Prior to amendment it read as follows:
“(4) Coordination with individual retirement accounts.--
Section 408(d)(2) shall be applied separately with respect to Roth IRAs and other individual retirement plans.”
Subsec. (d)(6). Pub. L. 105-206, Sec. 6005(b)(6)(A), added par. (6).
Subsec. (d)(7). Pub. L. 105-206, Sec. 6005(b)(7), added par. (7).
Subsec. (f). Pub. L. 105-206, Sec. 6005(b)(9), added subsec. (f).
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(77)-(78), effective March 23, 2018.
EFFECTIVE DATE OF 2017 AMENDMENTS
Amendment by Pub. L. 115-97, Sec. 11002(d)(1)(W), effective for taxable years beginning after December 31, 2017.
Amendment by Pub. L. 115-97, Sec. 13611(a), effective for taxable years beginning after December 31, 2017.
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendments by Sec. 108(d) of Pub. L. 110-458 effective as if included in the provisions of the Pension Protection Act of 2006 [Pub. L. 109-280, Sec. 824] to which they relate.
Amendments by Sec. 108(h) of Pub. L. 110-458 effective as if included in the provisions of the Pension Protection Act of 2006 [Pub. L. 109-280, Sec. 833] to which they relate.
Amendments by Sec. 109 of Pub. L. 110-245 effective with respect to deaths from injuries occurring on or after the date of the enactment of this Act [Enacted: June 17, 2008]. Sec. 109(d)(2)-(3) of Pub. L. 110-245 provided that:
“(2) APPLICATION OF AMENDMENTS TO DEATHS FROM INJURIES OCCURRING ON OR AFTER OCTOBER 7, 2001, AND BEFORE ENACTMENT- The amendments made by this section shall apply to any contribution made pursuant to section 408A(e)(2) or 530(d)(5) of the Internal Revenue Code of 1986, as amended by this Act, with respect to amounts received under section 1477 of title 10, United States Code, or under section 1967 of title 38 of such Code, for deaths from injuries occurring on or after October 7, 2001, and before the date of the enactment of this Act if such contribution is made not later than 1 year after the date of the enactment of this Act.
“(3) PENSION PROTECTION ACT CHANGES- Section 408A(e)(1) of the Internal Revenue Code of 1986 (as in effect after the amendments made by subsection (b)) shall apply to taxable years beginning after December 31, 2007.”
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendments by Sec. 824 of Pub. L. 109-280 effective for distributions after December 31, 2007.
Amendment by Sec. 833 of Pub. L. 109-280 effective for taxable years beginning after December 31, 2006.
Amendments by Sec. 512 of Pub. L. 109-222 effective for taxable years beginning after December 31, 2009.
EFFECTIVE DATE OF 2001 AMENDMENTS
Amendment by Sec. 617(e)(1) of Pub. L. 107-16 effective for taxable years beginning after December 31, 2005.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358, provided that:
“(a) IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2010, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2010.
“(b) APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income tax on restitution received by victims of the Nazi regime or their heirs or estates).”
ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE CARRIER BANKRUPTCY TO ROTH IRAS
Pub. L. 110-458, Sec. 125 provided that:
“(a) General Rule.—If a qualified airline employee receives any airline payment amount and transfers any portion of such amount to a Roth IRA within 180 days of receipt of such amount (or, if later, within 180 days of the date of the enactment of this Act), then such amount (to the extent so transferred) shall be treated as a qualified rollover contribution described in section 408A(e) of the Internal Revenue Code of 1986, and the limitations described in section 408A(c)(3) of such Code shall not apply to any such transfer.
“(b) Definitions and Special Rules.—For purposes of this section—
“(1) AIRLINE PAYMENT AMOUNT.—
“(A) IN GENERAL.—The term “airline payment amount” means any payment of any money or other property which is payable by a commercial passenger airline carrier to a qualified airline employee—
“(i) under the approval of an order of a Federal bankruptcy court in a case filed after September 11, 2001, and before January 1, 2007, and (ii) in respect of the qualified airline employee's interest in a bankruptcy claim against the carrier, any note of the carrier (or amount paid in lieu of a note being issued), or any other fixed obligation of the carrier to pay a lump sum amount. The amount of such payment shall be determined without regard to any requirement to deduct and withhold tax from such payment under sections 3102(a) and 3402(a).
“(B) EXCEPTION.—An airline payment amount shall not include any amount payable on the basis of the carrier's future earnings or profits.
“(2) QUALIFIED AIRLINE EMPLOYEE.—The term “qualified airline employee” means an employee or former employee of a commercial passenger airline carrier who was a participant in a defined benefit plan maintained by the carrier which? (A) is a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust exempt from tax under section 501(a) of such Code, and (B) was terminated or became subject to the restrictions contained in paragraphs (2) and (3) of section 402(b) of the Pension Protection Act of 2006.
“(3) REPORTING REQUIREMENTS.—If a commercial passenger airline carrier pays 1 or more airline payment amounts, the carrier shall, within 90 days of such payment (or, if later, within 90 days of the date of the enactment of this Act), report? (A) to the Secretary of the Treasury, the names of the qualified airline employees to whom such amounts were paid, and (B) to the Secretary and to such employees, the years and the amounts of the payments. Such reports shall be in such form, and contain such additional information, as the Secretary may prescribe.
“(c) Effective Date.—This section shall apply to transfers made after the date of the enactment of this Act with respect to airline payment amounts paid before, on, or after such date.”
INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION WITH THE EXXON VALDEZ LITIGATION
Pub. L. 110-343, Div. C, Sec. 504 provided that:
“(a) Income Averaging of Amounts Received From the Exxon Valdez Litigation.—For purposes of section 1301 of the Internal Revenue Code of 1986—
“(1) any qualified taxpayer who receives any qualified settlement income in any taxable year shall be treated as engaged in a fishing business (determined without regard to the commercial nature of the business), and
“(2) such qualified settlement income shall be treated as income attributable to such a fishing business for such taxable year.
“(b) Contributions of Amounts Received to Retirement Accounts.—
“(1) IN GENERAL.—Any qualified taxpayer who receives qualified settlement income during the taxable year may, at any time before the end of the taxable year in which such income was received, make one or more contributions to an eligible retirement plan of which such qualified taxpayer is a beneficiary in an aggregate amount not to exceed the lesser of—
“(A) $100,000 (reduced by the amount of qualified settlement income contributed to an eligible retirement plan in prior taxable years pursuant to this subsection), or
“(B) the amount of qualified settlement income received by the individual during the taxable year.
“(2) TIME WHEN CONTRIBUTIONS DEEMED MADE.—For purposes of paragraph (1), a qualified taxpayer shall be deemed to have made a contribution to an eligible retirement plan on the last day of the taxable year in which such income is received if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).
“(3) TREATMENT OF CONTRIBUTIONS TO ELIGIBLE RETIREMENT PLANS.—For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to paragraph (1) with respect to qualified settlement income, then—
“(A) except as provided in paragraph (4)—
“(i) to the extent of such contribution, the qualified settlement income shall not be included in taxable income, and
“(ii) for purposes of section 72 of such Code, such contribution shall not be considered to be investment in the contract,
“(B) the qualified taxpayer shall, to the extent of the amount of the contribution, be treated—
“(i) as having received the qualified settlement income—
“(I) in the case of a contribution to an individual retirement plan (as defined under section 7701(a)(37) of such Code), in a distribution described in section 408(d)(3) of such Code, and
“(II) in the case of any other eligible retirement plan, in an eligible rollover distribution (as defined under section 402(f)(2) of such Code), and
“(ii) as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution,
“(C) section 408(d)(3)(B) of the Internal Revenue Code of 1986 shall not apply with respect to amounts treated as a rollover under this paragraph, and
“(D) section 408A(c)(3)(B) of the Internal Revenue Code of 1986 shall not apply with respect to amounts contributed to a Roth IRA (as defined under section 408A(b) of such Code) or a designated Roth contribution to an applicable retirement plan (within the meaning of section 402A of such Code) under this paragraph.
“(4) SPECIAL RULE FOR ROTH IRAS AND ROTH 401(k)s.—For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to paragraph (1) with respect to qualified settlement income to a Roth IRA (as defined under section 408A(b) of such Code) or as a designated Roth contribution to an applicable retirement plan (within the meaning of section 402A of such Code), then—
“(A) the qualified settlement income shall be includible in taxable income, and
“(B) for purposes of section 72 of such Code, such contribution shall be considered to be investment in the contract.
“(5) ELIGIBLE RETIREMENT PLAN.—For purpose of this subsection, the term “eligible retirement plan” has the meaning given such term under section 402(c)(8)(B) of the Internal Revenue Code of 1986.
“(c) Treatment of Qualified Settlement Income Under Employment Taxes.—
“(1) SECA.?For purposes of chapter 2 of the Internal Revenue Code of 1986 and section 211 of the Social Security Act, no portion of qualified settlement income received by a qualified taxpayer shall be treated as self-employment income.
“(2) FICA.—For purposes of chapter21 of the Internal Revenue Code of 1986 and section 209 of the Social Security Act, no portion of qualified settlement income received by a qualified taxpayer shall be treated as wages.
“(d) Qualified Taxpayer.—For purposes of this section, the term “qualified taxpayer” means—
“(1) any individual who is a plaintiff in the civil action In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D. Alaska); or
“(2) any individual who is a beneficiary of the estate of such a plaintiff who-
“(A) acquired the right to receive qualified settlement income from that plaintiff; and
“(B) was the spouse or an immediate relative of that plaintiff.
“(e) Qualified Settlement Income.—For purposes of this section, the term “qualified settlement income” means any interest and punitive damage awards which are—
“(1) otherwise includible in taxable income, and
“(2) received (whether as lump sums or periodic payments) in connection with the civil action In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D. Alaska) (whether pre- or post-judgment and whether related to a settlement or judgment).”
PENSIONS AND INDIVIDUAL RETIREMENT ARRANGEMENT PROVISIONS OF ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001 MADE PERMANENT
Section 811 of Pub. L. 109-280 provided that:
“Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the provisions of, and amendments made by, subtitles A through F of title VI of such Act (relating to pension and individual retirement arrangement provisions).”
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendment by Sec. 4002(j) of Pub. L. 105-277 effective as if included in the provisions of the IRS Restructuring and Reform Act of 1998 to which it relates.
Amendments by Sec. 6005(b) of Pub. L. 105-206 effective as if included in the provisions of the Taxpayer Relief Act of 1997 to which they relate [Effective Date of Pub. L. 105-34, Sec. 302: Taxable years beginning after December 31, 1997].
Amendment by Sec. 7004(a) of Pub. L. 105-206 effective for taxable years beginning after December 31, 2004.
TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS FOR RELIEF RELATING TO HURRICANE KATRINA
Section 101(e) of Pub. L. 109-73 provided that:
“(e) INCOME INCLUSION SPREAD OVER 3 YEAR PERIOD FOR QUALIFIED HURRICANE KATRINA DISTRIBUTIONS.--
“(1) IN GENERAL.--In the case of any qualified Hurricane Katrina distribution, unless the taxpayer elects not to have this subsection apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable year period beginning with such taxable year.
“(2) SPECIAL RULE.--For purposes of paragraph (1), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of such Code shall apply.