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IRA recharacterizations

The IRS has given you the prerogative to change your mind—when it comes to your IRA contributions, that is.

What a recharacterization is

Generally speaking, a recharacterization moves money from a traditional IRA to a Roth IRA—or vice versa. More specifically, it changes the designation of a specific contribution from one type of IRA to the other.

Recharacterizations are tax-reportable and could be complicated. We recommend that you review this strategy with a qualified tax advisor to weigh the tax benefits and ensure everything is reported properly.

Why you might recharacterize an IRA contribution

To change a contribution from a traditional IRA to a Roth IRA

You may have contributed to a traditional IRA because you thought your income was going to be too high to be eligible for a Roth IRA contribution. But if your income ended up being lower than you expected, you may prefer to take advantage of the Roth IRA.

A recharacterization lets you move that year's contribution to a Roth IRA, which offers the ability to take tax-free withdrawals in retirement.*

To change a contribution from a Roth IRA to a traditional IRA

You may have contributed to a Roth IRA, but while preparing your tax return, you realize that either:

  • Your income was too high to qualify for a full Roth contribution.
  • You'd benefit more from an immediate tax deduction on a traditional IRA contribution.

A recharacterization lets you move that year's contribution—in whole or in part—to a traditional IRA.

When to complete your IRA contribution recharacterization

Your contribution must be recharacterized on or before your tax-filing deadline for the year for which it was made.

The IRS generally provides an extended time frame—until October 15—to complete your recharacterization. (You may be required to file an amended return at that time.)

How to request a recharacterization

Start by calling us at 800-205-6189—one of our experienced retirement specialists may be able to complete your recharacterization in a single phone call.

If it can't be done over the phone, you'll be instructed to complete and return this form instead:

Remember, a Roth conversion completed after December 31, 2017, can no longer be recharacterized back to a traditional IRA later.

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