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The place that I did the rollover deposited the $63K into the wrong type of IRA account they deposit into a rollover ira not a rollover roth ira.

The problem seems to be one with terminology. There is no such thing as a "rollover roth ira". ALL "rollover IRAs" are Traditional IRAs. That's because a "rollover IRA" is what pre-tax 401(k) money used to be required to be rolled into, if you ever wanted to be able to roll the money back into a 401(k). Since then, the law has been changed to allow pre-tax money from regular IRAs, as well as 401(k)s to be rolled into a 401(k), if the plan allows. So there's not really a need for the 'rollover' designation for an IRA any longer, but many brokerages still call these accounts 'rollover' accounts.

Because 'rollover' accounts were set up solely to be able to designate money that can be rolled back into a 401(k), and Roth IRAs cannot be rolled into a 401(k), there is no such thing as a "rollover Roth IRA".

Now do I have to pay taxes as a distrubtion which I in realty correcting the place I did the rollover error.

Was 401(k) money in a designated Roth account in the 401(k)? If so, then you need to IMMEDIATELY call the brokerage where the IRA is and tell them that there was a mistake made - that the money should have been rolled into a Roth IRA because it came from a designated Roth account in the 401(k). You need to get them to correct the mistake - DO NOT try to correct it yourself, because you may very well end up causing yourself to pay taxes on a distribution. It would probably be helpful if you provide the broker with the IRA account some statements from your 401(k) showing that the money was in a designated Roth account within the 401(k).

If the 401(k) money was NOT in a designated Roth account in the 401(k), then having it rolled over to a "rollover IRA" means that you won't pay any taxes on it until you either convert it to a Roth account, or withdraw it to use or invest in a taxable account.

AJ
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