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Recharacterizing excess contributions. You can re- characterize only actual contributions. If you are applying excess contributions for prior years as current contribu- tions, you can recharacterize them only if the recharacteri- zation would still be timely with respect to the tax year for which the applied contributions were actually made. Example. You contributed more than you were entitled to in 2018. You can’t recharacterize the excess contribu- tions you made in 2018 after April 15, 2019, because con- tributions after that date are no longer timely for 2018. Recharacterizing employer contributions. You can’t recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. SEPs are discussed in chapter 2 of Pub. 560. SIMPLE plans are discussed in chapter 3 of Pub. 560. Recharacterization not counted as rollover. The re- characterization of a contribution is not treated as a roll- over for purposes of the 1-year waiting period described earlier in this chapter under Rollover From One IRA Into Another. This is true even if the contribution would have been treated as a rollover contribution by the second IRA if it had been made directly to the second IRA rather than as a result of a recharacterization of a contribution to the first IRA. How Do You Recharacterize a Contribution? To recharacterize a contribution, you must notify both the trustee of the first IRA (the one to which the contribution was actually made) and the trustee of the second IRA (the one to which the contribution is being moved) that you have elected to treat the contribution as having been made to the second IRA rather than the first. You must make the notifications by the date of the transfer. Only one notification is required if both IRAs are maintained by the same trustee. The notification(s) must include all of the following information. • The type and amount of the contribution to the first IRA that is to be recharacterized. • The date on which the contribution was made to the first IRA and the year for which it was made. • A direction to the trustee of the first IRA to transfer in a trustee-to-trustee transfer the amount of the contribu- tion and any net income (or loss) allocable to the con- tribution to the trustee of the second IRA. • The name of the trustee of the first IRA and the name of the trustee of the second IRA. • Any additional information needed to make the trans- fer. In most cases, the net income you must transfer is de- termined by your IRA trustee or custodian. If you need to determine the applicable net income on IRA contributions made after 2018 that are recharacterized, use Worksheet 1-3. See Regulations section 1.408A-5 for more informa- tion. Timing. The election to recharacterize and the transfer must both take place on or before the due date (including extensions) for filing your tax return for the tax year for which the contribution was made to the first IRA. Extension. Ordinarily, you must choose to recharac- terize a contribution by the due date of the return or the due date plus extensions. However, if you miss this dead- line, you can still recharacterize a contribution if: • Your return was timely filed for the year the choice should have been made, and • You take appropriate corrective action within 6 months from the due date of your return excluding extensions. For returns due April 15, 2019, this period ends on October 15, 2019. When the date for doing any act for Determining the Amount of Net Income Due to an IRA Contribution and Total Amount to be Recharacterized Worksheet 1-3. Keep for Your Records 1. Enter the amount of your IRA contribution for 2019 to be recharacterized . . . . . . . . . . . . . . . . 1.

2. Enter the fair market value of the IRA immediately prior to the recharacterization (include any distributions, transfers, or recharacterization made while the contribution was in the account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Enter the fair market value of the IRA immediately prior to the time the contribution being recharacterized was made, including the amount of such contribution and any other contributions, transfers, or recharacterizations made while the contribution was in the account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Divide line 4 by line 3. Enter the result as a decimal (rounded to at least three places) . . . . . . 5.

6. Multiply line 1 by line 5. This is the net income attributable to the contribution to be recharacterized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

7. Add lines 1 and 6. This is the amount of the IRA contribution plus the net income attributable to it to be recharacterized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

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