IRA Recharacterization

Generally, you can recharacterize (correct) an IRA contribution by making a trustee-to-trustee transfer from one IRA to another type of IRA.

Trustee-to-trustee transfers are made directly between financial institutions or within the same financial institution. You generally must make the transfer by the due date of your return (including extensions) and reflect it on your return. However, if you timely filed your return without making the transfer, you can make the transfer within six months of the due date of your return, excluding extensions. If necessary, file an amended return reflecting the transfer (see Amending Form 8606, later). Write "Filed pursuant to section 301.9100-2" on the amended return.

A statement must be attached to your return explaining the recharacterization. This is can be entered in the TaxAct® program and the return will still be eligible for electronic filing.

To attach a statement:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Retirement Plan Income in the Federal Quick Q&A Topics menu to expand, then click IRA distribution explanation.
  3. Continue with the interview process to enter all of the appropriate information.

Additional Information

  • Pages 3 and 4 of IRS Instructions for Form 8606 Nondeductible IRAs provide the most definitive guidance for reporting recharacterizations.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.