**By Sarah Brenner, JD
Director of Retirement Education
Follow Us on X: @theslottreport**

The once-per-year IRA rollover rule sounds pretty easy to understand. You may only do one IRA-to-IRA (or Roth IRA-to-Roth IRA rollover) per year (365 days). However, this rule is often misunderstood.

One common confusion about the once-per-year rollover rule is whether multiple distributions or multiple deposits will trip you up.

**Multiple Distributions on Different Days and One Rollover Deposit**

If you can take a distribution on one day and roll it over on multiple different days and this is acceptable under the once-per-year rollover rule, is the opposite scenario also allowed? Can you take multiple distributions on different days and deposit them at one time as one rollover? The answer would be no. Even if all the distributions were taken from the same IRA, this would still not be allowed.

*Example:* Jimmy takes a $2,000 distribution from his IRA on December 1 and another $30,000 distribution on December 12. His plan is to roll over both on the same day to a new IRA. Unfortunately for Jimmy, only one of his IRA distributions is eligible for rollover. This is because the once-per year rule limits him to rolling over only one distribution within a 365-day period.

**One Distribution and Multiple Rollover Deposits**

If you take one distribution from your IRA, you may split the funds and roll them over to multiple IRAs. The rollovers could be done on different days and that would not be a problem. This works for purposes of the once-per-year rollover rule because only one distribution is received even though there is more than one rollover deposit.

*Example:* Annie receives a $90,000 distribution from her IRA on November 15. On November 20, Annie rolls over $75,000 to her IRA. On November 25, she decides to roll over the remaining $15,000 to another IRA. This is not a violation of the once-per year rollover rule because Annie received only one distribution even though she did two rollovers on two different dates.

**Do Direct Transfers**

The cost of misunderstanding the once-per-year rollover rule can be high. Distributions that are not eligible for rollover will most likely be fully taxable. An attempt to roll over these distributions will result in an excess contribution with possible penalties.

The best advice is to avoid 60-day rollovers and the complications of the once-per-year rollover rule. You can do this by moving your IRA funds as trustee-to-trustee transfers instead. With a transfer, the funds go directly from one IRA custodian to another. Transfers are not subject to the once-per year rule so you can move your IRA funds this way as many times as you like during the same year.

https://www.irahelp.com/slottreport/common-confusions-once-year-rollover-rule