There is conflicting IRS guidance on whether this can be done if you proceed with the usual direct rollovers that avoid mandatory withholding. The IRS may try to force pro rating of basis between both IRA rollovers if you do this, but their lack of follow up probably result in many taxpayers getting through unscathed. But since we are now in a new year, it gives the IRS plenty of time to clarify their ruling and that increases the risk of trying to do this will direct rollovers.

There IS a way that avoids this uncertainty, but you have to replace the withholding on the pre tax portion. This procedure is backed up by Sec 402(c)2 of the tax code and goes like this:
1)Request the check for the full balance be issued to you. The company must withhold 20% of the pre tax balance.
2) Have your TIRA and Roth accounts open and ready to receive rollovers because you have only 60 days to complete indirect rollovers.
3) Roll the pre tax amount including withholding that you must replace to a TIRA FIRST. This will be tax free because you rolled over the gross amount.
4) After this is completed, the roll the remaining after tax balance to a Roth IRA, and your Roth conversion will be tax free.
5) This still leaves you short of the 20% until you file your return over a year from now. To offset this temporary loss of funds, you could reduce your other withholding or estimates accordingly and thereby recover your money earlier.

The reason this works is the tax code says that if the employee receives a distribution and then does a rollover, the pre tax amounts are deemed rolled over first. This is why it is critical to roll the pre tax amount to a TIRA prior to doing the Roth rollover.

If you cannot afford to front the 20% withholding, you could select a partial distribution from the plan. Eg if you request only half the balance, then the 20% will also be half and you would only have to front 1/2. But the plan require you to take a lump sum distribution and then this would not work.

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