! purposes, you may have to refigure items based

CAUTION on modified AGI, such as taxable social security

benefits and passive activity losses allowed under the special allowance for rental real estate activities. See Can You Contribute to a Roth IRA? in Pub. 590-A for details.

Distributions. See the instructions for Part III, later.

Basis. See Line 22 , later, for your basis in Roth IRAs.

SEP IRAs: Traditional and Roth

Prior to January 1, 2023, traditional SEP IRAs

TIP were called SEP IRAs in these instructions. The

term “traditional” was added to the name to distinguish them from Roth SEP IRAs, which were introduced in section 601 of the SECURE 2.0 Act of 2022 and effective beginning January 1, 2023.

A simplified employee pension (SEP) arrangement is an employer-sponsored plan under which an employer can make contributions to a traditional SEP IRA or a Roth SEP IRA for its employees. If you make your own contributions to a traditional SEP IRA (excluding employer contributions you make if you are self-employed), they are treated as contributions to a traditional IRA and may be deductible or nondeductible. Traditional SEP IRA

g. Foreign housing exclusion or deduction from Form 2555.

4 Instructions for Form 8606 (2025)

distributions are reported in the same manner as traditional IRA distributions.

Since January 1, 2023, employers have been able to contribute to Roth SEP IRAs under a SEP arrangement. If you make your own contributions to a Roth SEP IRA (excluding employer contributions you make if you are self-employed), they are treated as contributions to a Roth IRA and are made with after-tax dollars and are not deductible. Roth SEP IRA distributions are reported in the same manner as Roth IRA distributions.

See Pub. 560 for additional details on SEP IRAs.

SIMPLE IRAs: Traditional and Roth

Prior to January 1, 2023, traditional SIMPLE IRAs

TIP were called SIMPLE IRAs in these instructions.

The term “traditional” was added to the name to distinguish them from Roth SIMPLE IRAs, which were introduced in section 601 of the SECURE 2.0 Act of 2022 and effective beginning January 1, 2023.

A SIMPLE IRA plan is a employer sponsored plan under which certain small employers (including self-employed individuals) can make contributions to traditional SIMPLE IRAs or Roth SIMPLE IRAs for their employees. Your employer’s contributions under a SIMPLE IRA plan don’t prevent you from making your own contributions to a traditional IRA or Roth IRA that isn’t a SIMPLE IRA. SIMPLE IRA plans are also known as Savings Incentive Match Plans for Employees.

A SIMPLE IRA (whether a traditional SIMPLE IRA or a Roth SIMPLE IRA) is subject to certain restrictions that do not generally apply to other traditional IRAs or Roth IRAs. For example, an individual cannot make their own contributions to their SIMPLE IRA. As a result, discussions of contributions in these instructions will not cover contributions to SIMPLE IRAs.

Since January 1, 2023, employers with a SIMPLE IRA plan have been able to contribute to Roth SIMPLE IRAs under their SIMPLE IRA plan. Contributions to a Roth SIMPLE IRA are nondeductible and includible in income.

See Pub. 560 for additional details on SIMPLE IRAs.

Special Terms

Certain 2025 retirement plan distribution repayments treated as rollovers. The term “certain 2025 retirement plan distribution repayments treated as rollovers” is used on 2025 Form 8606 in the Part I and III lead-ins and in lines 6, 7, 15c, and 25c. It is used throughout these instructions as needed. The term describes repayments of the following distributions where the distributions were made in 2025.

and throughout these instructions as needed. The term describes the following distributions made in 2025.

• Qualified disaster distributions (also known as qualified disaster recovery distributions).

• Qualified birth or adoption distributions.

• Emergency personal expense distributions.

• Domestic abuse distributions.

• Terminal illness distributions.