What type of withdrawal is specifically prohibited from being rolled over?

Hardship distributions are specifically prohibited from being rolled over because they are intended to provide immediate financial relief for participants facing certain urgent and pressing needs, such as medical expenses, purchase of a primary home, or tuition payments. The Internal Revenue Service (IRS) permits these withdrawals only under specific circumstances that demonstrate a particular financial hardship, highlighting the need for immediate access to funds rather than long-term investment purposes.

The nature of hardship distributions requires that the funds be used for the specified immediate needs, so allowing these amounts to be rolled over into another retirement account would counteract the objective of providing quick access to funds for pressing financial situations.

In contrast, other types of contributions, such as rollover contributions, in-service withdrawals, and Roth contributions, generally retain eligibility for rollover to other retirement accounts, as they are not tied to immediate and specific financial hardships. This distinguishes hardship distributions from other types of withdrawals that may have different regulatory frameworks governing their rollover treatment.