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DEFINED BENEFIT, DEFINED CONTRIBUTION OR COMBINED PLAN DEFINED BENEFIT, DEFINED CONTRIBUTION OR COMBINED PLAN
Special rules and options
If your payment includes after-tax
contributions
After-tax contributions included in a payment are not
taxed. If a payment is only part of your benet, an allocable
portion of your after-tax contributions is generally included
in the payment. If you have pre-1987 after-tax contributions
maintained in a separate account, a special rule may apply
to determine whether the after-tax contributions are
included in a payment.
You may roll over to an IRA a payment that includes
after-tax contributions through either a direct rollover or
a 60-day rollover. You must keep track of the aggregate
amount of the after-tax contributions in all of your IRAs (in
order to determine your taxable income for later payments
from the IRAs). If you choose a direct rollover of only a
portion of the amount paid from STRS Ohio and at the
same time the rest is paid to you, the portion directly rolled
over consists rst of the amount that would be taxable if
not rolled over. For example, assume you are receiving a
complete distribution of your benet, which totals $12,000,
of which $2,000 is after-tax contributions. In this case, if you
roll over $10,000 to an IRA in a 60-day rollover, no amount
is taxable because the $2,000 amount not rolled over is
treated as being after-tax contributions. If you do a direct
rollover of the entire amount paid from STRS Ohio to two or
more destinations at the same time, you can choose which
destination receives the after-tax contributions.
If you do a 60-day rollover to an IRA of only a portion of
a payment made to you, the after-tax contributions are
treated as rolled over last. For example, assume you receive
a distribution of $10,000, of which $2,000 is after-tax
contributions, and no part of the distribution is directly
rolled over. In this case, if you roll over $8,000 to an IRA that
is not a Roth IRA in a 60-day rollover, no amount is taxable
because the $2,000 amount not rolled over is treated as
being after-tax contributions.
You may roll over to an eligible employer plan all of a
payment that includes after-tax contributions, but only
through a direct rollover (and only if the receiving plan
separately accounts for after-tax contributions and is not
a 457(b) plan). You can make the rollover within 60 days
to an eligible employer plan of part of a payment that
includes after-tax contributions, but only up to the amount
of the payment that would be taxable if not rolled over.
If you miss the 60-day rollover deadline
Generally, the 60-day rollover deadline cannot be
extended. However, the Internal Revenue Service (IRS) has
the limited authority to waive the deadline under certain
extraordinary circumstances, such as when external events
prevented you from completing the rollover by the 60-day
rollover deadline. Under certain circumstances, you may
claim eligibility for a waiver of the 60-day rollover deadline
by making a self-certication. Otherwise, to apply for a
waiver, you must le a private letter ruling request with
the IRS. Private letter ruling requests require the payment
of a nonrefundable user fee. For more information, see IRS
Publication 590-A, Contributions to Individual Retirement
Arrangements (IRAs).
If you were born on or before Jan. 1, 1936
If you were born on or before Jan. 1, 1936, and receive a
lump-sum distribution that you do not roll over, special
rules for calculating the amount of the tax on the payment
might apply to you. For more information, see IRS
Publication 575, Pension and Annuity Income.
If you roll over your payment to a Roth IRA
You can roll over a payment from STRS Ohio to a Roth
IRA, but not to a designated Roth account in an eligible
employer plan.
If you roll over the payment to a Roth IRA, a special
rule applies under which the amount of the payment
rolled over (reduced by any after-tax amounts) will be
taxed. However, the 10% additional income tax on early
distributions will not apply (unless you take the amount
rolled over out of the Roth IRA within ve years, counting
from Jan. 1 of the year of the rollover).
If you roll over the payment to a Roth IRA, later payments
from the Roth IRA that are qualied distributions will not
be taxed (including earnings after the rollover). A qualied
distribution from a Roth IRA is a payment made after
you are age 59-1/2 (or after your death or disability, or
as a qualied rst-time home buyer distribution of up to