Eligibility | Contributions | Transfers |
Rollovers | Distributions | Administration |
| | Traditional IRA | Roth IRA |
| ELIGIBILITY Top |
| Age | No minimum age. No contributions for 70? year or later. | No minimum age. No maximum age. |
| Income | Must have earned income from services performed. | Must have earned income from services performed. Depends on Modified Adjusted Gross Income (MAGI). Not eligible if single and MAGI exceeds $110,000. Not eligible if married, filing jointly and MAGI exceeds $160,000. |
| CONTRIBUTIONS Top |
| | Traditional IRA | Roth IRA |
| Deductibility | Depends on whether active participant is in employer plan and if so, on MAGI. | No deduction. |
| Maximum Contribution | Lesser of 100% of earned income or $2,000. | Lesser of 100% of earned income or $2,000. May be limited by MAGI. |
| Deadline | Tax return due date (no extensions). | Tax return due date (no extensions). |
| TRANSFERS Top |
| | Traditional IRA | Roth IRA |
| Like Plans | May only perform nonreportable transfer to other Traditional IRAs. | May only perform nonreportable transfer to other Roth IRAs. |
| From/To Other IRAs | May perform reportable recharacterization from Traditional to Roth IRA or vice versa. | May perform reportable recharacterization from Roth to Traditional IRA or vice versa. |
| ROLLOVERS Top |
| | Traditional IRA | Roth IRA |
| Like Plans | May roll to other Traditional IRAs. 60-day rule and 12-month restriction apply. | May roll to other Roth IRAs. 60-day rule and 12-month restriction apply. |
| From/To Other IRAs | Traditional IRAs may only roll into Traditional IRAs (includes SEPs) and Roth IRAs (conversion). SIMPLEs may roll into Traditional IRAs after two years. | Traditional and SEP IRAs may convert to Roth IRAs.
Roth IRAs may only roll into Roth IRAs. SIMPLEs may roll into Roth IRAs after two years. |
From/To QRP
(Qualified Retirement Plans) | Traditional IRAs may accept eligible rollover distributions from a QRP. Conduit IRA assets may roll back into QRP. | QRP distributions may not roll into Roth IRA.
Roth IRA may not roll into QRP. |
| DISTRIBUTIONS Top |
| | Traditional IRA | Roth IRA |
| Prior to 59? | Unless exception, subject to 10% penalty on taxable amount. | Unless exception, will be subject to 10% penalty on any taxable amount or any nonqualified distribution of taxable conversion amounts within five years of the conversion. |
| Mandatory | Required minimum distribution must be made for 70? year and each succeeding year. | No mandatory distributions. |
| Qualified | Not applicable. | Tax-free distribution if five years since initial contribution and due to death, disability, attainment of 59? or first-time home purchase. |
| Non-Qualified | Not applicable. | First dollars out are return of basis (nontaxable) until all basis distributed. Earnings (taxable) are distributed next until IRA depleted. Ordering rules apply.
All Roth IRAs for the benefit of an individual are treated as one. |
| To Beneficiaries | Options depend on whether holder died before or on or after required beginning date.
Options may include five-year rule, life expectancy payments and spouse beneficiary's ability to treat as own. | Options may include five-year rule, life expectancy payments and spouse beneficiary's ability to treat as own. |
| ADMINISTRATION Top |
| | Traditional IRA | Roth IRA |
| Trustee, Custodian, Issuer | May be established with trustee, custodian, issuer or entity with nonbank trustee powers. | Same as Traditional IRA. |
| Opening Documents | IRS Form 5305 and Form 5305-A, prototypes. | IRA Form 5305-R, Form 5305-RA, Form 5305-RB, prototypes. Prototype document available which offers Traditional and Roth IRAs combined in same document. |
| Withholding | Nonperiodic distributions subject to 10% withholding unless IRA holder elects no withholding or elects to have more than 10% withheld. | Same as Traditional IRA. |
| Reporting | Form 5498 used to report contributions and fair market value to IRS.
Form 1099-R used to report distributions. | Same as Traditional IRA. |
