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What Does Direct Rollover Mean?
A distribution of eligible rollover assets from a qualified plan, 403(b) plan, or a governmental 457 plan to a Traditional IRA, qualified plan, 403(b) plan, or a governmental 457 plan; or a distribution from an IRA to a qualified plan, 403(b) plan or a governmental 457 plan. Investopedia explains Direct Rollover
Direct rollover assets are made payable to the qualified plan or IRA Custodian/Trustee, never to the individual.
The transfer of funds out of a 401(k) plan or qualified plan directly into another account, such as an Individual Retirement Account (IRA) or a specially established account. By doing a direct rollover, the plan owner avoids paying withholding taxes and a penalty (typically between 10 and 20 percent). If, instead of doing a direct rollover, the owner opts to have plan money paid directly to him- or herself, taxes and penalties withheld reduce the amount of the payout.
A direct rollover is reportable but not taxable.