Question

Can 401k loan offset from 1099-R having code M allowed to rollover to another qualified plan even after 60 days(till April 2019) ?I have amount in BOX 1 and BOX 2 .

Forum|Forum|7 years ago
June 6, 2019
1 reply
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I had 401k loan in 2017 from previous employer which got cashed out in 2018.In 1099-R form this amount is mentioned as Taxable amount (in box 2a).

Turbo Tax mentions a special rule which states that even though I have cashed out 401k loan amount in 2018 but I have till April 2019 to rollover the amount to another qualified plan . Now My new employer {I have changed my employer in 2018.} is not sure if they should accept this rollover as 60 days has been passed and is looking for IRS article or special rule .Please clarify which special rule of IRS confirms the same?

TurboTax Premier Online

M

mglauner

You are correct that there is a new IRS regulation concerning 401K loan rollovers that give you until the tax due date to complete your rollover.

"Effective January 1, 2018, if the plan loan offset is due to plan termination or severance from employment, instead of the usual 60-day rollover period, you have until the due date, including extensions, for filing the Federal income tax return for the taxable year in which the offset occurs".

Here's more info (see #6):

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans#6

Edited 2/7/19 7:28 PM