The 60-Day Rollover Rule: Exceptions, Rules, and Penalties Explained

Everything you need to know about the IRS 60-day rollover rule, including common traps, waiver exceptions, and tax penalties.

The 60-day rollover rule dictates that if you take a distribution from an IRA or 401(k) payable to yourself, you have exactly 60 days to deposit it into another qualified retirement account. Failure to do so results in the distribution being taxed as ordinary income, plus a potential 10% early withdrawal penalty if under age 59.5. The IRS only allows one indirect rollover per 12-month period. We discuss the automatic waiver conditions (e.g., financial institution errors, severe postal errors) and how to apply for a private letter ruling if you miss the deadline.