What is a 60-day rollover?
In an indirect rollover, your plan or custodian pays the distribution to you personally. You then have 60 days to deposit the full amount into an IRA. Do it correctly and the move stays tax-free; miss it and the distribution is taxable, plus penalties if you're under the applicable age.
The limit is one such rollover per 12-month period across all your IRAs, not one per account.
Why do 60-day rollovers go wrong?
Withholding is the first trap: employer plans must withhold 20% for taxes, so the check you receive is short. To roll over the full balance you must replace the withheld amount from other funds, or the shortfall counts as a taxable distribution.
The deadline is the second trap. Sixty days is unforgiving, extensions are rare, and 'the check got lost' is not a defense. A direct rollover, custodian to custodian, avoids both traps entirely.
How does a 60-day rollover show up in practice?
Almost always as an accident: someone requests a 'rollover' and receives a check made out to themselves. If that happens, act immediately. Better still, specify a direct rollover payable to the new custodian for your benefit from the start.