401k after tax dollars to Roth IRA
2015-54: Seems to say after tax dollars can be directly rolled into a Roth IRA. MY question is as follows: I am still working and my employer has kept track of after tax dollars. According to my 401(k) plan it will allow in service distribution/transfer now but only my after tax dollars not my pre-tax. Could I transfer my after tax 401(k) funds directly to a Roth IRA?
Permalink Submitted by Alan - IRA critic on Tue, 2015-05-19 21:54
Yes, but the earnings on the after tax sub account (which are pre tax) must also be distributed along with the after tax contributions. The referenced IRS Notice allows you do direct those earnings to your TIRA and as part of the same distribution request your after tax contribution amount is rolled to your Roth IRA. No current taxes are due.