After Tax portion of a Rollover into a Roth IRA
Can the after-tax portion of a Pension Lump Sum rollover be deposited into a Roth IRA? Will it count as a contribution? The client is 73 years old and has no earned income to qualify for a contribution.
Permalink Submitted by Alan - IRA critic on Thu, 2013-12-12 20:02
If client gets a check for the after tax portion of the plan, he can roll it over to a Roth IRA. He does not need to have earned income to do a Roth conversion. The Roth rollover should be tax free if the plan does not show any taxable income in Box 2a of the 1099R. Note that any RMD portion of a distribution cannot be rolled over, so if the only funds received were the after tax portion, then only the excess over the RMD can be rolled over to a Roth IRA.