After Tax Contributions from 401k to a Roth IRA
Rolling over a 401k. There are pre-tax contributions and after-tax. I plan to rollover the Pre-Tax to a traditional IRA. And the after-tax to a Roth IRA. Is there a special instructions to give the 401k provider to handle that? Can I have them issue the after-tax payable to the Roth IRA custodian as a rollover or does it need to be made to the name of the account holder as a direct rollover?
Permalink Submitted by Alan - IRA critic on Tue, 2022-06-21 18:44
This split rollover must be requested and completed at the same time if done as direct rollovers. You could also do this the old way by doing a direct rollover of the pre tax balance to a TIRA and having a check for the after tax balance sent to you, which you could then do a 60 day (indirect) rollover to your Roth IRA. There would be no required withholding since the amount paid to you would be after tax dollars. There would be no taxes due on any of the above transactions.