If I have a Roth IRA with $10k, $8k of which was contributed by me then can I withdraw $4k and put it back?

I understand that it won't be taxed since it is already "after-tax" money but would putting it back count against the $6k/year contribution limit?

1 Answer 1


It depends on how you "withdraw" it and "put it back".

If you take out and then return the money "normally", it is a contribution and counts against the $6k annual limit. As a second option, however, you can reverse the distribution as a rollover if you follow these two rules:

  1. The funds must be returned within 60 days.
  2. The funds must not have been used in a rollover within the past 12 months.

The administrator of your Roth IRA should have a process (usually involving a couple forms) to complete the rollover or distribution reversal. A rollover does not contribute towards the $6k limit.

What this means practically is that you get a free 60 day loan from the Roth IRA.

A third option is to ask your IRA custodian to do a "return of contributions" or "removal of excess". They may have a special form to fill out in order to do this. You choose a particular contribution that you made previously, and they return part or all of that contribution to you, plus any earnings or minus any losses. This must be done before the due date of your tax return for the year of the contribution, and the earnings, if any, will count as taxable income.

If you do this, then the original contribution no longer counts towards the $6k limit, but when you put the money back in, that will count towards the limit.

  • There are also reversals of contributions (408(d)(4) distributions), in which you take out contributions, along with the earnings on them, before the due date of the tax return, and the contributions are treated as though you had never made them. (TD Ameritrade calls this a "removal of excess" and has a particular form that must be filled out in order to do this.) Do you have anything to say about those? Commented Sep 23, 2020 at 18:11
  • Is there a limit to the number of times you can do this in one calendar year?
    – MonkeyZeus
    Commented Sep 23, 2020 at 18:55
  • @TannerSwett That would work, you just have to make sure to withdrawal any earnings on the original contribution as well.
    – Nosjack
    Commented Sep 23, 2020 at 18:59
  • @MonkeyZeus Due to rule 2, you can only do this once per calendar year. IRS rules also say that this applies regardless of how many IRAs you own
    – Nosjack
    Commented Sep 23, 2020 at 19:03
  • I don't think it's sufficient to simply withdraw the amount of the contributions plus earnings (or minus losses); the IRA custodian also has to report the distribution using Code 8 or Code P on Form 5498. Earlier this year, I tried to perform a distribution under section 408(d)(4) by simply taking a distribution; TD Ameritrade then told me that it didn't work that way, and that I would need to submit a removal-of-excess form in order to take the distribution correctly. It's possible that I misunderstood the situation; I'm no tax lawyer. Commented Sep 23, 2020 at 19:08

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