Missed the 60-Day IRA Rollover Deadline? The IRS Fix Costs $10,000 Now and $3,500 Next May. Check the Free One First.

If you took a check out of an IRA or 401(k) and didn’t get it into the new account within 60 days, the IRS treats the whole thing as a withdrawal. You owe income tax on it. If you’re under 59 1/2, you usually owe another 10% on top.

You can get the deadline waived. Right now the paid route costs $10,000. On October 22 the IRS announced a cheaper one that opens May 1, 2027, at $3,500. Before you pay either, check the free route. It covers more situations than you’d guess.

A $10,000 fee for a $9,600 problem

Miss the window without a reason on the IRS’s short list, and today your only option is a private letter ruling. The IRS FAQ is blunt: “The appropriate user fee of $10,000 must accompany every request for a waiver.”

Take the $30,000 distribution the IRS uses in its own example. In the 22% bracket, that’s $6,600 of federal income tax. Under 59 1/2, add $3,000 for the 10% additional tax. Total: $9,600.

The fee to ask for mercy was bigger than the bill. Translation: the waiver was built for big balances and people with tax lawyers.

What changed on October 22

Revenue Procedure 2026-33 creates the IRA Compliance Resolution System. Congress ordered it in the SECURE 2.0 Act of 2022, four years ago. It lets you, the IRA owner, ask the IRS to waive the 60-day rule, and the fee for a regular submission filed before 2028 is $3,500.

IRS specialists will weigh things like bank errors, hospitalization, postal error, whether you cashed the check, and how much time has passed. During 2027 you can use either the new program or the old letter ruling. Starting in 2028, the IRS expects the new program to be the only door.

What you can put back doesn’t change. Took $30,000? The most you can redeposit is $30,000. And for an IRA-to-IRA rollover, you can’t have done another one in the prior 12 months.

Check the free routes first

The automatic waiver covers bank screwups. If the new institution got your money before day 60, you followed its deposit instructions, and the only problem was its error, you’re covered, provided the money lands within a year.

Self-certification covers more, and it’s free. Rev. Proc. 2020-46 lists 12 qualifying reasons, including a financial institution error, a check that was misplaced and never cashed, money parked in an account you thought was an IRA, severe damage to your home, a death in the family, serious illness, a postal error, and a distribution sent to a state unclaimed property fund. You give the receiving custodian a letter using the IRS’s model language, deposit the money as soon as you can (within 30 days after the problem clears is the safe harbor), and keep a copy.

Here’s the catch. The IRS can check your story on audit. Don’t self-certify a reason you can’t document.

The move

Stop taking checks. Ask for a direct trustee-to-trustee transfer every time. No check, no 60-day clock, and the once-a-year limit doesn’t apply. Our IRA guide and 401(k) vs. IRA breakdown cover where the money should land.

Already missed it? Read the 12 reasons tonight. If you fit one, self-certify for free. If you don’t and the balance is big, file this away: the $3,500 route opens May 1, 2027.

Run that $30,000 through our retirement calculator over 20 years. That lost growth is what a missed deadline really costs.

The detail

Rev. Proc. 2026-33 takes effect May 1, 2027. The $3,500 fee covers regular submissions filed before January 1, 2028; later fees come in Rev. Proc. 2028-4. Only the IRA owner or an authorized representative can file a 60-day request. The automatic waiver (Rev. Proc. 2003-16) and self-certification (Rev. Proc. 2016-47, updated by 2020-46) stay in place.

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