ERS Question
We have a client who has an Employee Retirement Account (ERS) through the state of Alabama that had both taxable and non taxable funds in it. We have tried to transfer that to our company. However, ERS called the client today and said that they would have to send the non-taxable amount to him by check. Will he have to pay a penalty or anything on that? Thanks.
Permalink Submitted by Alan - IRA critic on Thu, 2019-02-14 23:09
There should not be any tax or penalty due, but client needs to be sure that the 1099R is correct next January. There will be two 1099R forms if one was a direct rollover and the after tax amount a distribution. If client does not need the after tax money for spending, it should be rolled over to a Roth IRA (tax free) within 60 days.