Can post tax contributions be rolled to a Roth IRA?
We are working with a client who has who both pre and post tax dollars invested in an employer sponsored plan.
Can the post tax dollars be rolled to a Roth IRA?
Thank you!
We are working with a client who has who both pre and post tax dollars invested in an employer sponsored plan.
Can the post tax dollars be rolled to a Roth IRA?
Thank you!
Permalink Submitted by Alan Spross on Wed, 2008-06-04 19:34
Many experts believe that this can be done using the new direct Roth conversion available this year under the PPA. However, the IRS has not officially clarified that the pre tax funds can go to a TIRA and the after tax amounts to a Roth as part of the same distribution. It may be worth waiting for a clarification. Also, a plan is only obligated to offer a direct rollover to one destination, not multi destinations.
However, with respect to pre 1987 after tax contributions, which can come out separately, the situation is more clear. Those particular amounts should be able to transfer directly to a Roth IRA tax free.