If you are an employee or a self-employed person entitled to an eligible rollover distribution (7.7) from a qualified plan, you may choose a direct rollover, or if you actually receive the distribution you may make a personal rollover. To avoid withholding, choose a direct rollover. You must receive a written explanation of your rollover rights from your plan administrator before an eligible rollover distribution is made.
An eligible rollover distribution from a qualified employer plan, 403(b) plan, or governmental 457 plan may be rolled over to a Roth IRA, but the rollover is not tax free. A rollover to a Roth IRA, like a conversion from a traditional IRA, is a taxable distribution except to the extent it is allocable to after-tax contributions (8.21).
If you choose to have your plan administrator make a direct rollover of an eligible rollover distribution to a traditional IRA or another eligible employer plan (7.7), you avoid tax on the payment and no tax will be withheld. If you are changing jobs and want a direct rollover to the plan of the new employer, make sure that the plan accepts rollovers; if it does not, choose a direct rollover to a traditional IRA.
When you select the direct rollover option, your plan administrator may transfer the funds directly by check or electronically to the new plan, or you may be given a check payable to the new plan that you must deliver to the ...