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Indirect IRA rollovers do not have mandatory withholding by the custodian....while qualified retirement plans must withhold 20% and send to the IRS. If this happens, the IRA owner must redeposit the rollover within 60 days plus make up the 20% withholding out of their pocket. Any of this amount that is not deposited to an IRA or retirement plan within the 60 days, unless the reasons are beyond the control of the IRA owner, will be considered by the IRS to be a withdrawal and must be included as income and may be subject to a 10% penalty if not yet 59.5 or another of the exceptions to the penalty.

If you receive a rollover as a check, as long as the check is made out to the IRA of the owner, it will be considered a direct rollover and will not be subject to the 60 day rollover rule....although the actual check itself may require that it be deposited within 30 days, but that is a separate issue.

I've read of but have never seen anyone who does constant IRA rollovers as a way of accessing their IRA dollars without tax or penalty and who would be the ones most affected by this new rule. But it sounds like a lot of work.

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