How to Roll an IRA Into a 401K Plan

••• investment image by Kit Wai Chan from

An IRA is an individual retirement account that people can open, contribute to and manage without their employer. A 401k plan is a retirement plan that is set up and managed by your employer. Usually people want to roll money from a 401k plan to an IRA, but you may want to roll money from your IRA to your 401k plans if you like the plan options your 401k offers, if the fees are lower or if you think you can get better returns from your 401k plan. However, even though 401k plans are allowed to accept rollovers from IRAs under the Internal Revenue Service's rules, not all plans do.

Contact your employer's human resources department to find out if your employer's 401k plan accepts rollover money. If the plan does not, you cannot roll money from your IRA into the 401k plan.

Contact your financial institution that has your IRA to request a rollover. Each financial institution will have different forms. You will receive 80 percent of the amount you are rolling over. The remaining 20 percent will be withheld to be put toward any income taxes or penalties you incur if you fail to complete the rollover. Money that is not redeposited will be considered distributed, which means that it is counted as taxable income and, if you are not 59 1/2, will be counted as a non-qualified distribution, meaning you will owe a 10 percent penalty on the withdrawal.

Deposit 100 percent of the rollover in your 401k plan within 60 days. Weekends and holidays do not extend this deadline. Any money not redeposited will be considered withdrawn.

Report the amount of the rollover as a non-taxable IRA distribution on your income tax return. Write "0" as the taxable amount of the IRA distribution and write "rollover" next to the amount.


  • You cannot rollover money from a Roth IRA to a 401k plan.