Recharacterizations

Generally, you can recharacterize (correct) an IRA contribution by making a trustee-to-trustee transfer from one IRA to another type of IRA. Trustee-to-trustee transfers are made directly between financial institutions or within the same financial institution. You must generally make the transfer by the due date of your return (including extensions) and reflect it on your return. However, if you timely filed your return without making the transfer, you can make the transfer within 6 months of the due date of your return, excluding extensions. If necessary, file an amended return reflecting the transfer (see Amending Form 8606, later). Enter “Filed pursuant to section 301.9100-2” on the amended return.

No recharacterizations of conversions made in 2018 or later. A conversion of a traditional IRA to a Roth IRA, and a rollover from any other eligible retirement plan to a Roth IRA, made in tax years beginning after December 31, 2017, cannot be recharacterized as having been made to a traditional IRA.

Reporting recharacterizations. Treat any recharacterized IRA contribution as though the amount of the contribution was originally contributed to the second IRA, not the first IRA. For the recharacterization, you must transfer the amount of the original contribution plus any related earnings or less any related loss. In most cases, your IRA trustee or custodian figures the amount of the related earnings you must transfer. If you need to figure the related earnings, see How Do You Recharacterize a Contribution? in chapter 1 of Pub. 590-A. Treat any earnings or loss that occurred in the first IRA as having occurred in the second IRA. You can’t deduct any loss that occurred while the funds were in the first IRA. Also, you can’t take a deduction for a contribution to a traditional IRA if you later recharacterize the amount. The following discussion explains how to report the two different types of recharacterizations, including the statement that you must attach to your return explaining the recharacterization.

1. You made a contribution to a traditional IRA and later recharacterized part or all of it in a trustee-to-trustee transfer to a Roth IRA. If you recharacterized only part of the contribution, report the nondeductible traditional IRA portion of the remaining contribution, if any, on Form 8606, Part I. If you recharacterized the entire contribution, don’t report the contribution on Form 8606. In either case, attach a statement to your return explaining the

recharacterization. If the recharacterization occurred in 2025, include the amount transferred from the traditional IRA on 2025 Form 1040, 1040-SR, or 1040-NR, line 4a. If the recharacterization occurred in 2026, report the amount transferred only in the attached statement, and not on your 2025 or 2026 tax return. See Example next.

Example. You are single, covered by an employer retirement plan, and you contributed $4,000 to a new traditional IRA on May 27, 2025. On February 24, 2026, you determine that your 2025 modified AGI will limit your traditional IRA deduction to $1,000. The value of your traditional IRA on that date is $4,400. On the same date, you recharacterize $3,000 of the traditional IRA contribution as a Roth IRA contribution, and have $3,300 ($3,000 contribution plus $300 related earnings) transferred from your traditional IRA to a Roth IRA in a trustee-to-trustee transfer. You deduct the $1,000 traditional IRA contribution on your 2025 Form 1040. You don’t file a 2025 Form 8606. You attach a statement to your 2025 return explaining the recharacterization. The statement indicates that you contributed $4,000 to a traditional IRA on May 27, 2025; recharacterized $3,000 of that contribution on February 24, 2026, by transferring $3,000 plus $300 of related earnings from your traditional IRA to a Roth IRA in a trustee-to-trustee transfer; and deducted the remaining traditional IRA contribution of $1,000 on your 2025 Form 1040. You don’t report the $3,300 distribution from your traditional IRA on your 2025 Form 1040 because the distribution occurred in 2026. You don’t report the distribution on your 2026 Form 1040 because the recharacterization related to 2025 and was explained in an attachment to your 2025 return.

2. You made a contribution to a Roth IRA and later recharacterized part or all of it in a trustee-to-trustee transfer to a traditional IRA. Report the nondeductible traditional IRA portion of the recharacterized contribution, if any, on Form 8606, Part I. Don’t report the Roth IRA contribution (whether or not you recharacterized all or part of it) on Form 8606. Attach a statement to your return explaining the recharacterization. If the recharacterization occurred in 2025, include the amount transferred from the Roth IRA on your 2025 Form 1040, 1040-SR, or 1040-NR, line 4a. If the recharacterization occurred in 2026, report the amount transferred only in the attached statement, and not on your 2025 or 2026 tax return. See Example next.

Example. You are single, covered by an employer retirement plan, and you contributed $4,000 to a new Roth IRA on June 17, 2025. On December 30, 2025, you determine that your 2025 modified AGI will allow a full traditional IRA deduction. On that same date, you recharacterize the Roth IRA contribution as a traditional IRA contribution and have $4,200, the balance in the Roth IRA account ($4,000 contribution plus $200 related earnings), transferred from your Roth IRA to a traditional IRA in a trustee-to-trustee transfer. You deduct the $4,000 traditional IRA contribution on your 2025 Form 1040. You don’t file a Form 8606. You attach a statement to your return explaining the recharacterization. The statement indicates that you contributed $4,000 to a new Roth IRA on June 17, 2025; recharacterized that contribution on December 30, 2025, by transferring $4,200, the balance in the Roth IRA, to a traditional IRA in a trustee-to-trustee

6 Instructions for Form 8606 (2025)

transfer; and deducted the traditional IRA contribution of $4,000 on your 2025 Form 1040. You include the $4,200 distribution from your Roth IRA on your 2025 Form 1040, line 4a.