Direct rollover

Direct rollover

Movement of tax-deferred retirement plan money from one qualified plan or custodian to another. No immediate tax liabilities or penalties are incurred, but there is an IRS reporting requirement.

Direct Rollover

The transfer of funds from an IRA to another qualified retirement account owned by the same person or vice versa. Rollovers happen most often when an employee changes jobs and therefore IRA accounts. A direct rollover goes directly from one account to the other; it is not distributed to the account holder at any point. A direct rollover may only be done once per year for each account. One must report a direct rollover to the IRS, but it is not taxable.