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United States Code (Last Updated: May 24, 2014) |
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Title 26. INTERNAL REVENUE CODE |
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SubTitle A. Income Taxes |
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Chapter 1. NORMAL TAXES AND SURTAXES |
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SubChapter D. Deferred Compensation, Etc. |
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Part I. PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC. |
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SubPart A. General Rule |
§ 408A. Roth IRAs
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(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.
(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.
(c) Treatment of contributions (1) No deduction allowed No deduction shall be allowed under section 219 for a contribution to a Roth IRA.
(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— (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 (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. (3) Limits based on modified adjusted gross income (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) the excess of— (I) the taxpayer’s adjusted gross income for such taxable year, over (II) the applicable dollar amount, bears to (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. (B) Definitions For purposes of this paragraph— (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 (ii) the applicable dollar amount is— (I) in the case of a taxpayer filing a joint return, $150,000, (II) in the case of any other taxpayer (other than a married individual filing a separate return), $95,000, and (III) in the case of a married individual filing a separate return, zero. (C) Marital status Section 219(g)(4) shall apply for purposes of this paragraph.
(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) such dollar amount, multiplied by (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 1992” in subparagraph (B) thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000. (4) Contributions permitted after age 70½ Contributions to a Roth IRA may be made even after the individual for whom the account is maintained has attained age 70½.
(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: (A) Section 401(a)(9)(A). (B) The incidental death benefit requirements of section 401(a). (6) Rollover contributions (A) In general No rollover contribution may be made to a Roth IRA unless it is a qualified rollover contribution.
(B) Coordination with limit A qualified rollover contribution shall not be taken into account for purposes of paragraph (2).
(7) Time when contributions made For purposes of this section, the rule of section 219(f)(3) shall apply.
(d) Distribution rules For purposes of this title— (1) Exclusion Any qualified distribution from a Roth IRA shall not be includible in gross income.
(2) Qualified distribution For purposes of this subsection— (A) In general The term “qualified distribution” means any payment or distribution— (i) made on or after the date on which the individual attains age 59½, (ii) made to a beneficiary (or to the estate of the individual) on or after the death of the individual, (iii) attributable to the individual’s being disabled (within the meaning of section 72(m)(7)), or (iv) which is a qualified special purpose distribution. (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.
(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.
(3) Rollovers from an eligible retirement plan other than a Roth IRA (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) there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution, (ii) section 72(t) shall not apply, and (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. (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) subparagraph (A).
(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.
(f) Individual retirement plan For purposes of this section— (1) a simplified employee pension or a simple retirement account may not be designated as a Roth IRA; and (2) contributions to any such pension or account shall not be taken into account for purposes of subsection (c)(2)(B).
Prospective Amendment
For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title and Internal Revenue Notices listed in a table under section 401 of this title.
Amendments
2008—Subsec. (c)(3)(B). Pub. L. 110–458, § 108(d)(1), in introductory provisions, struck out second “an” before “eligible” and “other than a Roth IRA” before “during any taxable year”, and inserted as concluding provisions “This subparagraph shall not apply to a qualified rollover contribution from a Roth IRA or to a qualified rollover contribution from a designated Roth account which is a rollover contribution described in section 402A(c)(3)(A).”
Subsec. (c)(3)(C), (E). Pub. L. 110–458, § 108(h)(1), redesignated subpar. (C) relating to inflation adjustment as subpar. (E).
Subsec. (d)(3)(B). Pub. L. 110–458, § 108(d)(2), struck out “(other than a Roth IRA)” after “section 402(c)(8)(B))” and inserted at end “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)”.
Subsec. (e). Pub. L. 110–245, § 109(b), amended subsec. (e), as in effect after amendment by section 824(a) of Pub. L. 109–280, by amending text generally. Prior to amendment, text read as follows: “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.”
Pub. L. 110–245, § 109(a), amended subsec. (e), as in effect before amendment by section 824(a) of Pub. L. 109–280, by reenacting heading without change and amending text to read as follows: “For purposes of this section—
“(1) In general.—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.
“(2) Military death gratuity.—
“(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) the sum of the amounts received during such period by such individual under such sections with respect to such person, reduced by
“(ii) the amounts so received which were contributed to a Coverdell education savings account under section 530(d)(9).
“(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).
“(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.” See 2006 Amendment note below.
2006—Subsec. (c)(3)(B). Pub. L. 109–222, § 512(a)(1), redesignated subpar. (C) as (B) and struck out former subpar. (B). Prior to amendment, text read as follows: “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.
This subparagraph shall not apply to a qualified rollover contribution from a Roth IRA or to a qualified rollover contribution from a designated Roth account which is a rollover contribution described in section 402A(c)(3)(A).” See Effective Date of 2006 Amendment note below.
Pub. L. 109–280, § 824(b)(1), substituted “eligible retirement plan” for “IRA” in heading and “an eligible retirement plan (as defined by section 402(c)(8)(B))” for “individual retirement plan” in introductory provisions. See Effective Date of 2006 Amendment note below.
Subsec. (c)(3)(B)(i). Pub. L. 109–222, § 512(a)(2), substituted “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. (c)(3)(C). Pub. L. 109–222, § 512(a)(1), redesignated subpar. (D), relating to marital status, as (C). Former subpar. (C) redesignated (B). See Effective Date of 2006 Amendment note below.
Pub. L. 109–280, § 833(c), added subpar. (C) relating to inflation adjustment.
Subsec. (c)(3)(D), (E). Pub. L. 110–458, § 108(h)(2), redesignated subpar. (E) as (D) and substituted “subparagraph (B)(ii)” for “subparagraph (C)(ii)”.
Subsec. (d)(3). Pub. L. 109–280, § 824(b)(2)(E), substituted “an eligible retirement plan” for “an IRA” in heading.
Subsec. (d)(3)(A). Pub. L. 109–280, § 824(b)(2)(A), substituted “sections 402(c), 403(b)(8), 408(d)(3), and 457(e)(16)” for “section 408(d)(3)” in introductory provisions.
Subsec. (d)(3)(A)(iii). Pub. L. 109–222, § 512(b)(1), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “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
Subsec. (d)(3)(B). Pub. L. 109–280, § 824(b)(2)(B), substituted “eligible retirement plan (as defined by section 402(c)(8)(B))” for “individual retirement plan”.
Subsec. (d)(3)(D). Pub. L. 109–280, § 824(b)(2)(C), (D), substituted “persons subject to section 6047(d)(1), or all of the foregoing persons” for “or both” and inserted “or 6047” after “408(i)”.
Subsec. (d)(3)(E). Pub. L. 109–222, § 512(b)(2)(B), substituted “2-year” for “4-year” in heading.
Subsec. (d)(3)(E)(i). Pub. L. 109–222, § 512(b)(2)(A), amended cl. (i) generally. Prior to amendment, text read as follows:
“(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.”
Subsec. (e). Pub. L. 109–280, § 824(a), reenacted heading without change and amended text of subsec. (e) generally. Prior to amendments by Pub. L. 109–280, § 824(a), and Pub. L. 110–245, § 109(a), text read as follows: “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). 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.” See 2008 Amendment note above.
2001—Subsec. (e). Pub. L. 107–16 inserted “Such term includes a rollover contribution described in section 402A(c)(3)(A).” after first sentence.
1998—Subsec. (c)(3)(A). Pub. L. 105–206, § 6005(b)(1), substituted “shall not exceed an amount equal to the amount determined under paragraph (2)(A) for such taxable year, reduced” for “shall be reduced” in introductory provisions.
Subsec. (c)(3)(A)(ii). Pub. L. 105–206, § 6005(b)(2)(A), inserted “or a married individual filing a separate return” after “joint return”.
Subsec. (c)(3)(B). Pub. L. 105–206, § 6005(b)(2)(B)(i), inserted “, for the taxable year of the distribution to which such contribution relates” after “if” in introductory provisions.
Subsec. (c)(3)(B)(i). Pub. L. 105–206, § 6005(b)(2)(B)(ii), struck out “for such taxable year” after “gross income”.
Subsec. (c)(3)(C)(i). Pub. L. 105–206, § 7004(a), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “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”.
Pub. L. 105–206, § 6005(b)(2)(C), struck out “and the deduction under section 219 shall be taken into account” after “taken into account”.
Subsec. (c)(3)(C)(i)(II). Pub. L. 105–277 substituted “, and” for period at end.
Subsec. (d)(1). Pub. L. 105–206, § 6005(b)(5)(B), substituted “Exclusion” for “General rules” in heading and amended text generally. Prior to amendment, text read as follows:
“(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, § 6005(b)(3)(A), added subpar. (B) and struck out heading and text of former subpar. (B). Text read as follows: “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, § 6005(b)(3)(B), added subpar. (C).
Subsec. (d)(3)(A). Pub. L. 105–206, § 6005(b)(4)(A), added cl. (iii) and concluding provisions and struck out former cl. (iii) which read as follows: “in the case of a distribution before
Subsec. (d)(3)(D). Pub. L. 105–206, § 6005(b)(6)(B), redesignated subpar. (E) as (D) and struck out heading and text of former subpar. (D). Text read as follows: “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)(3)(E). Pub. L. 105–206, § 6005(b)(6)(B), redesignated subpar. (F) as (E). Former subpar. (E) redesignated (D).
Subsec. (d)(3)(F). Pub. L. 105–206, § 6005(b)(6)(B), redesignated subpar. (G) as (F). Former subpar. (F) redesignated (E).
Pub. L. 105–206, § 6005(b)(4)(B), added subpar. (F).
Subsec. (d)(3)(G). Pub. L. 105–206, § 6005(b)(6)(B), redesignated subpar. (G) as (F).
Pub. L. 105–206, § 6005(b)(4)(B), added subpar. (G).
Subsec. (d)(4). Pub. L. 105–206, § 6005(b)(5)(A), substituted “Aggregation and ordering rules” for “Coordination with individual retirement accounts” in heading and amended text generally. Prior to amendment, text read as follows: “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, § 6005(b)(6)(A), added par. (6).
Subsec. (d)(7). Pub. L. 105–206, § 6005(b)(7), added par. (7).
Subsec. (f). Pub. L. 105–206, § 6005(b)(9), added subsec. (f).
Effective Date Of Amendment
Pub. L. 110–458, title I, § 108(h)(2),
Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of this title.
Pub. L. 110–245, title I, § 109(d),
Pub. L. 109–280, title VIII, § 824(b)(1),
Pub. L. 109–280, title VIII, § 824(c),
Amendment by section 833(c) of Pub. L. 109–280 applicable to taxable years beginning after 2006, see section 833(d) of Pub. L. 109–280, set out as a note under section 25B of this title.
Pub. L. 109–222, title V, § 512(c),
Amendment by Pub. L. 107–16 applicable to taxable years beginning after
Amendment by Pub. L. 105–277 effective as if included in the provision of the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105–206, to which such amendment relates, see section 4002(k) of Pub. L. 105–277, set out as a note under section 1 of this title.
Amendment by section 6005(b)(1)–(7), (9) of Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.
Pub. L. 105–206, title VII, § 7004(b),
Effective Date
Section applicable to taxable years beginning after
Miscellaneous
Pub. L. 110–458, title I, § 125,