Recharacterization and Return of Excess IRA Contribution Deadline

October 17, 2022 is the deadline to process recharacterizations of 2021 IRA contributions and to process return of excess IRA contributions made in 2021.

Recharacterizations of IRA Contributions
Customers who wish to change the nature of an IRA contribution may recharacterize such a contribution prior to the due date (including extensions) for filing the customer’s federal income tax return for the year for which the contribution was made to the IRA. The deadline to process a recharacterization of a contribution made for 2021 is October 17, 2022.

Customers can request a recharacterization by completing the Premiere Select IRA Recharacterization Request form, which must be submitted to National Financial Services LLC (NFS) for manual processing. The form (1.747222.107) is available on the Marketing Fulfillment Central Web site, which can be accessed from Wealthscape^SM (Resources > Marketing Fulfillment Central) or from the Web (https://www.nfmarketingcentral.com).

A recharacterization processed in 2022 will be reflected on the 2022 1099-R and 5498 forms that will be mailed in January 2023. A recharacterization does not affect a prior year tax form.

Return of Excess IRA Contributions

Customers who have made an excess IRA contribution have until the due date (including extensions) for filing their federal income tax return to request a Return of Excess (ROE) Contribution. The deadline to process an ROE for a contribution made in 2021 is October 17, 2022. Note: Excess IRA contributions for a year that are not withdrawn by the deadline are subject to a 6% penalty tax. The 6% penalty applies for each year the excess remains in the IRA. In addition, the earnings on the excess contribution may be subject to a 10% penalty. Customers can request an ROE by completing a Premiere Select IRA One Time Distribution Request form (not required for accounts governed by Asset Movement Authorization).

Correspondents can process ROEs in the Integrated Cashiering Platform (ICP). To ensure that an ROE for a contribution made in 2021 is processed prior to the customer’s deadline, correspondents have until 4:00PM ET on October 17, 2022 to enter and approve the transaction. Please note that the last day to request a distribution via the standard 2-day EFT process is October 14, 2022, provided that the request is entered and paperwork is submitted (if applicable) by 4:00PM ET.

The IRS has provided tax relief for victims of recent storms and wildfires that extends the October 17 deadline. For details, please refer to these IRS Notices:

TC129027(1022)1