Hi Jeremy. Huge fan here. I have a question. Is it possible to rollover a 401k to Roth IRA using the provisions of the Cares Act?.
Thanks
Welcome @Ryzing!
Hm… you can rollover a 401k to an IRA at any time, but a few things to be aware of:
- “Rolling over” is the process of transferring between types of accounts. From a 401k to an IRA for example. This process doesn’t change the tax status. (i.e. pre tax money stays pre tax) so it shouldn’t be a taxable event. You can do this at any time… doesn’t depend on your income, doesn’t count toward the annual contribution limit.
- “Converting” is the process of moving from a pre-tax account to a post-tax account. This is a taxable event. So you would owe taxes on all the money you convert for that calendar year.
So when you say “rollover a 401k to a Roth IRA”, that process would likely be BOTH of the above. A rollover to get to an IRA, then a conversion to get to a Roth IRA. The second part means you get hit by taxes.
I’m not sure what the Cares Act has to do with it though.You can do those things any time, and doesn’t depend on your income or count toward the contribution limit. If you also want to contribute to an IRA, you would need earned income and I don’t think payments from the CARES act count towards that.
Does any of that help?! Did I understand your question correctly?!
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