60 day rollover to originating qualified plan

[Golgi]

A participant requests an in-service distribution from her 401k plan. The distribution is processed. The participant subsequently changes her mind. Can the participant do a in indirect rollover back to the originating qualified plan? (still within the 60 day time frame) If so, does the participant have to pay back the taxes to make the rollover whole?

[My 2 cents]

Just speculating here - I don't work directly with 401(k)s.

It is my understanding that if a participant is to receive (for example) a distribution of $50,000 and $10,000 is withheld for taxes, to avoid a taxable event, the entire $50,000 (i.e., the $40,000 in hand plus another $10,000 from somewhere) must be rolled over within the 60 days. If only the $40,000 in hand is rolled over, there remains a $10,000 taxable event (for which 100% was, in effect, withheld for taxes). At least I think so.

No idea whether one gets the opportunity to put it back where it came from, but presumably the same rule would apply as to the amount needed to avoid a taxable event. Other issues may arise as to whether the plan from which the in-service distribution was paid would allow the participant to return some or all of the distribution. If there is any issue with the plan accepting the money back, the participant should use the money to open some sort of IRA.

[david rigby]

For ANY rollable distribution, the participant may rollover any amount between 0% and 100%. The 100% is measured BEFORE any required withholding.

[QDROphile]

Plan terms should be consulted, but there is no legal impediment to rolling back with the 60-day limit. To the extent the full amount of the distribution (determined before withholding) is not rolled over (to the plan, an IRA, or other eligible retirement plan) within 60 days, the amount that is not rolled over is included in gross income.

[K2retire]

Plan terms should be consulted, but there is no legal impediment to rolling back with the 60-day limit. To the extent the full amount of the distribution (determined before withholding) is not rolled over (to the plan, an IRA, or other eligible retirement plan) within 60 days, the amount that is not rolled over is included in gross income.

Unless, of course, the withdrawal was a hardship and therefor not eligible for rollover.