Missed the 60-Day Rollover Deadline? What the IRS Allows

Moving money from one retirement account to another sounds simple. But if the check is made out to you instead of to your new account, a clock starts. You get 60 days to finish the move, and people miss that window more often than you might think.

On October 22, 2026, the IRS announced a new program that will eventually handle requests to excuse a missed deadline. Here is how the rule works, what you can do today if you are late, and what changes in 2027.

What is the 60-day rollover rule?

A rollover is moving money from one retirement account into another without paying tax on it. There are two ways to do it. In a direct rollover, your old account sends the money straight to the new one. In an indirect rollover, the money is paid to you first.

The 60-day rule applies to the second kind. The IRS says you have 60 days from the date you receive the distribution to roll it over. If you miss it, the payout is generally taxable. You may also owe the additional 10% tax on early withdrawals unless an exception applies.

There are two traps to know about:

• Mandatory withholding. A payout from a workplace plan like a 401(k) has 20% withheld for taxes. If you only roll over what you received, the withheld part counts as taxable unless you replace it from other money.
• One rollover per year. You can make only one rollover from an IRA to another IRA in any 12-month period. Direct transfers between institutions and Roth conversions do not count.

Example: how a 401(k) payout goes wrong

This is an illustration with round numbers. Say you leave a job and your 401(k) pays you a $25,000 check.

• Withholding: $25,000 × 20% = $5,000 goes to the IRS.
• Check you receive: $25,000 − $5,000 = $20,000.
• If you receive the check on November 5, 2026, your 60 days end on January 4, 2027.

To roll over the full $25,000 and avoid tax on all of it, you would need to deposit your $20,000 check plus $5,000 from your own savings. If you deposit only $20,000, the missing $5,000 is generally taxable income. The $5,000 withheld counts as tax you already paid when you file your return.

What happens if you miss the deadline?

The money is generally treated as a taxable distribution for the year you received it. That can push you into a higher tax bracket. It can also trigger the 10% additional tax unless an exception applies. You can estimate the bill with our income tax calculator.

The good news is that the IRS can excuse a late rollover. The IRS may waive the 60-day requirement when you missed it because of circumstances beyond your control. It cannot waive other rollover rules, like the one-rollover-per-year limit.

What are the valid reasons for a late rollover?

Under Revenue Procedure 2020-46, you can self-certify if one or more of these 12 things kept you from finishing on time:

1. The bank or other financial institution made an error.
2. The check was misplaced and never cashed.
3. The money went into an account you mistakenly thought was a retirement account.
4. Your main home was severely damaged.
5. A family member died.
6. You or a family member was seriously ill.
7. You were incarcerated.
8. A foreign country imposed restrictions.
9. A postal error occurred.
10. The payout came from an IRS levy and the money was later returned to you.
11. The company paying out delayed giving you information the new account needed, despite your reasonable efforts.
12. The payout was sent to a state unclaimed property fund.

You must also meet these conditions: the IRS has not already denied a waiver for that payout, and you deposit the money as soon as practicable after the reason ends. The IRS treats 30 days as a safe harbor, which means a deposit within 30 days after the reason stops meets that test.

Your three paths to a waiver

For most people with a clear reason from the list, self-certification is the practical route. A private letter ruling is for cases that do not fit the list.

What is changing with the new IRA program?

On October 22, 2026, the IRS released Revenue Procedure 2026-33, which creates the IRA Compliance Resolution System, or ICRS. It follows a law passed in 2022, the SECURE 2.0 Act, that told the government to build a way to fix certain IRA errors.

Here is what the rule says:

• ICRS is effective May 1, 2027.
• It lets IRA custodians and owners ask the IRS to correct certain inadvertent failures, which means honest mistakes.
• It moves 60-day waiver requests out of private letter rulings. In 2027 you can use either route. The IRS says it expects that starting in 2028, these requests will be allowed only through ICRS.
• Self-correction is not available under ICRS right now.

The same day, the IRS also updated the correction program for workplace plans, Revenue Procedure 2026-34, effective October 22, 2026. That one is mostly for employers who run plans, not for individual savers.

What to do now

1. Choose a direct rollover when you can. Ask your old plan to send the money straight to the new account. It avoids the 60-day clock and the 20% withholding.
2. Write down the date. If a check is made out to you, mark the day you got it and count 60 days. Put the deadline on your calendar.
3. Replace the withheld amount. For a 401(k) payout, plan to add the 20% from savings so the whole amount rolls over.
4. If you are already late, act fast. Figure out whether one of the 12 reasons applies, and deposit the money as soon as you can, ideally within 30 days after the problem ends.
5. Ask the receiving provider for its form. Use the model letter in Revenue Procedure 2020-46, or one that is substantially similar, and keep a copy in your files.
6. Keep proof. Save the bank letter, the postmark or the medical record that backs up your reason, in case of an audit.
7. Talk to a tax professional if the amount is large or your reason is not on the list. A mistake here can be expensive.

To see what your retirement savings could grow to if you keep them invested, try the 401(k) calculator or the retirement calculator. For this year’s savings limits, see our 2026 401(k) and IRA limits.

This article is general information, not personal financial or tax advice.