How to Refund an IRA Distribution

by Mark Kennan

If you took an IRA distribution, but then realized you did not need it and wanted to put it back in your IRA, you may be able to count it as a rollover if you act fast. If more than 60 days have elapsed, you are out of luck because the IRS considers the money permanently withdrawn. However, if you can act quickly enough, you can put the money back in the IRA without having to pay any taxes or penalties. If you complete the rollover, you also need to report it on your taxes.

Deposit the IRA distribution back in the IRA within 60 days of receiving the distribution. The IRS permits you to roll over money back in the same account from which it came.

Report the amount of the withdrawal as a nontaxable IRA distribution on either Form 1040 or Form 1040A of your income taxes. On Form 1040, report the amount on line 15a. On Form 1040, report the amount on line 11a.

Report the amount of the withdrawal that you did not put back in your IRA, if any, as a taxable IRA distribution on either Form 1040 or Form 1040A of your income taxes. If you rolled all of the distribution back in, enter "0." On Form 1040, report the amount on line 15b. On Form 1040, report the amount on line 11b.

Write "Rollover" next to the taxable portion of your IRA distribution on your income tax return to notify the IRS you refunded the money back as a rollover. As long as you refunded the entire amount, you will owe no income taxes. However, you can only perform one rollover per account per 12-month period.

Items you will need

  • IRS Form 1040 or Form 1040A

Photo Credits

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