Distributions and Rollovers — Tax-Free Rollovers: 403(b) Retirement Plans (2026 IRS Guide)

This guide covers “Distributions and Rollovers — Tax-Free Rollovers” within 403(b) retirement plans. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 571 (01/2026), Tax-Sheltered Annuity Plans (403(b) Plans), published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Distributions and Rollovers — Tax-Free Rollovers

You can generally roll over tax free all or any part of a distribution from a 403(b) plan to a traditional IRA or a non-Roth eligible retirement plan, except for any nonqualifying distributions, described later. You may also roll over any part of a distribution from a 403(b) plan by converting it through a direct rollover, described below, to a Roth IRA. Conversion amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. See Pub. 590-A for more information about conversion into a Roth IRA.

Note:

A participant is required to roll over distribution amounts received within 60 calendar days in order for the amount to be treated as nontaxable. Distribution amounts that are rolled over within the 60 days aren’t subject to the 10% additional tax on early distributions.

Note:

The repayment of a qualified birth or adoption distribution, an emergency personal expense distribution, or a distribution to a domestic abuse victim from an applicable eligible retirement plan is treated as a direct transfer of the distribution to the plan within 60 days of the distribution.

Rollovers to and from 403(b) plans.

You can generally roll over tax free all or any part of a distribution from an eligible retirement plan to a 403(b) plan. Beginning January 1, 2008, distributions from tax-qualified retirement plans and tax-sheltered annuities can be converted by making a direct rollover into a Roth IRA subject to the restrictions that currently apply to rollovers from a traditional IRA into a Roth IRA. Converted amounts are generally includible in your taxable income in the year of the distribution from your 403(b) account. See Pub. 590-A for more information on conversion into a Roth IRA.

If a distribution includes both pre-tax contributions and after-tax contributions, the portion of the distribution that is rolled over is treated as consisting first of pre-tax amounts (contributions and earnings that would be includible in income if no rollover occurred). This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you don’t have to include any of the distribution in income.

For more information on rollovers and eligible retirement plans, see Pub. 575.

Caution:

If you roll over money or other property from a 403(b) plan to an eligible retirement plan, see Pub. 575 for information about possible effects on later distributions from the eligible retirement plan.

Hardship exception to rollover rules.

The IRS may waive the 60-day rollover period if the failure to waive such requirement would be against equity or good conscience, including cases of casualty, disaster, or other events beyond the reasonable control of an individual.

Ways to get a waiver of the 60-day rollover requirement.

There are three ways to obtain a waiver of the 60-day rollover requirement.

• You qualify for an automatic waiver.

• You self-certify that you met the requirements of a waiver.

• You request and receive a private letter ruling granting a waiver.

How do you qualify for an automatic waiver?

You qualify for an automatic waiver if all of the following apply.

• The financial institution receives the funds on your behalf before the end of the 60-day rollover period.

• You followed all of the procedures set by the financial institution for depositing the funds into an IRA or other eligible retirement plan within the 60-day rollover period (including giving instructions to deposit the funds into a plan or IRA).

• The funds are not deposited into a plan or IRA within the 60-day rollover period solely because of an error on the part of the financial institution.

• The funds are deposited into a plan or IRA within 1 year from the beginning of the 60-day rollover period.

• It would have been a valid rollover if the financial institution had deposited the funds as instructed.

If you do not qualify for an automatic waiver, you can use the self-certification procedure to make a late rollover contribution or you can apply to the IRS for a waiver of the 60-day rollover requirement.

How do you self-certify that you qualify for a waiver?

Based on Revenue Procedure 2016-47, 2016-37 I.R.B. 346, available at IRS.gov/irb/2016-37_IRB/ar09.html, you may make a written certification to a plan administrator or an IRA trustee that you missed the 60-day rollover contribution deadline because of one or more of the 11 reasons listed in Revenue Procedure 2016-47. A plan administrator or an IRA trustee may rely on the certification in accepting and reporting receipt of the rollover contribution. You may make the certification by using the model letter in the appendix to the revenue procedure or by using a letter that is substantially similar. There is no IRS fee for self certification. A copy of the certification should be kept in your files and be available if requested on audit.

For additional information on rollovers, see Pub. 590-A.

How do you apply for a waiver ruling and what is the fee?

You can request a ruling according to the procedures outlined in Revenue Procedure 2003-16, as modified by Revenue Procedure 2016-47 and Revenue Procedure 2020-46; and Revenue Procedure 2026-4. See Appendix A for the applicable user fee.

How does the IRS determine whether to grant a waiver in a private letter ruling?

In determining whether to issue a favorable letter ruling granting a waiver, the IRS will consider all of the relevant facts and circumstances, including:

• Whether errors were made by the financial institution, that is, the plan administrator, or IRA trustee, issuer, or custodian;

• Whether you were unable to complete the rollover within the 60-day period due to death, disability, hospitalization, incarceration, serious illness, restrictions imposed by a foreign country, or postal error;

• Whether you used the amount distributed; and

• How much time has passed since the date of the distribution.

Note:

The IRS can waive only the 60-day rollover requirement and not the other requirements for a valid rollover contribution.

For more information on waivers of the 60-day rollover requirement, go to IRS.gov/Retirement-Plans/Retirement-Plans-FAQS-Relating-to-Waivers-of-the-60-Day-Rollover-Requirement.

Eligible retirement plans.

The following are considered eligible retirement plans.

• IRAs.

• Roth IRAs.

• 403(a) annuity plans.

• 403(b) plans.

• Government eligible 457 plans.

• Qualified retirement plans.

If the distribution is from a designated Roth account, then the only eligible retirement plan is another designated Roth account or a Roth IRA.

Nonqualifying distributions.

You can’t roll over tax free:

• Minimum required distributions (generally required to begin at age 73 if you reach age 72 after December 31, 2022);

• Substantially equal payments over your life or life expectancy;

• Substantially equal payments over the joint lives or life expectancies of your beneficiary and you;

• Substantially equal payments for a period of 10 years or more;

• Hardship distributions; or

• Corrective distributions of excess contributions or excess deferrals, and any income allocable to the excess, or excess annual additions and any allocable gains.

Rollover of nontaxable amounts.

You may be able to roll over the nontaxable part of a distribution (such as your after-tax contributions) made to another eligible retirement plan, traditional IRA, or Roth IRA. The transfer must be made either through a direct rollover to an eligible plan that separately accounts for the taxable and nontaxable parts of the rollover or through a rollover to a traditional IRA or Roth IRA.

If you roll over only part of a distribution that includes both taxable and nontaxable amounts, the amount you roll over is treated as coming first from the taxable part of the distribution.

Direct rollovers of 403(b) plan distributions.

You have the option of having your 403(b) plan make the rollover directly to a traditional IRA, Roth IRA, or new plan. Before you receive a distribution, your plan will give you information on this. It is generally to your advantage to choose this option because your plan won’t withhold tax on the distribution if you choose it.

Distribution received by you.

If you receive a distribution that qualifies to be rolled over, you can roll over all or any part of the distribution. Generally, you will receive only 80% of the distribution because 20% must be withheld. If you roll over only the 80% you receive, you must pay tax on the 20% you didn’t roll over. You can replace the 20% that was withheld with other money within the 60-day period to make a 100% rollover.

Voluntary deductible contributions.

For tax years 1982 through 1986, employees could make deductible contributions to a 403(b) plan under the IRA rules instead of deducting contributions to a traditional IRA.

If you made voluntary deductible contributions to a 403(b) plan under these traditional IRA rules, the distribution of all or part of the accumulated deductible contributions may be rolled over if it otherwise qualifies as a distribution you can roll over. Accumulated deductible contributions are the deductible contributions:

• Plus:

  1. Income allocable to the contributions,

  2. Gain allocable to the contributions, and

• Minus:

  1. Expenses and losses allocable to the contributions; and

  2. Distributions from the contributions, income, or gain.

Excess employer contributions.

The portion of a distribution from a 403(b) plan transferred to a traditional IRA that was previously included in income as excess employer contributions isn’t an eligible rollover distribution.

Its transfer doesn’t affect the rollover treatment of the eligible portion of the transferred amounts. However, the ineligible portion is subject to the traditional IRA contribution limits and may create an excess IRA contribution subject to a 6% excise tax. See chapter 1 of Pub. 590-A.

Qualified domestic relations order (QDRO).

You may be able to roll over tax free all or any part of an eligible rollover distribution from a 403(b) plan that you receive under a QDRO. If you receive the interest in the 403(b) plan as an employee's spouse or former spouse under a QDRO, all of the rollover rules apply to you as if you were the employee. You can roll over your interest in the plan to a traditional IRA or another 403(b) plan. For more information on the treatment of an interest received under a QDRO, see Pub. 575.

Spouses of deceased employees.

If you are the spouse of a deceased employee, you can roll over the qualifying distribution attributable to the employee. You can make the rollover to any eligible retirement plan.

After you roll money and other property over from a 403(b) plan to an eligible retirement plan, and you take a distribution from that plan, you won’t be eligible to receive the capital gain treatment or the special averaging treatment for the distribution.

Second rollover.

If you roll over a qualifying distribution to a traditional IRA, you can, if certain conditions are satisfied, later roll the distribution into another 403(b) plan. For more information, see IRA as a holding account (conduit IRA) for rollovers to other eligible plans in chapter 1 of Pub. 590-A.

Nonspouse beneficiary.

A nonspouse beneficiary may make a direct rollover of a distribution from a 403(b) plan of a deceased participant if the rollover is a direct transfer to an inherited IRA established to receive the distribution. If the rollover is a direct trustee-to-trustee transfer to an IRA established to receive the distribution:

• The transfer will be treated as an eligible rollover distribution,

• The IRA will be considered an inherited account, and

• The required minimum distribution rules that apply in instances where the participant dies before the entire interest is distributed will apply to the transferred IRA.

For more information on IRAs, see Pubs. 590-A and 590-B.

Frozen deposits.

The 60-day period usually allowed for completing a rollover is extended for any time that the amount distributed is a frozen deposit in a financial institution. The 60-day period can’t end earlier than 10 days after the deposit ceases to be a frozen deposit.

A frozen deposit is any deposit that on any day during the 60-day period can’t be withdrawn because:

1. The financial institution is bankrupt or insolvent, or

2. The state where the institution is located has placed limits on withdrawals because one or more banks in the state are (or are about to be) bankrupt or insolvent.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

• Publication 571 (01/2026), Tax-Sheltered Annuity Plans (403(b) Plans): Distributions and Rollovers — Tax-Free Rollovers — Internal Revenue Service; 2026 edition.

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.