Roth Rollovers

Submitted by Don Warnke on Tue, 2023-05-30 12:48

client has Roth contributions in several 401ks. the establish date of the oldest is 2016. If they roll all the Roth contributions into a Roth IRA will they maintain the 2016 start date for determining qualified distributions or will a new date begin for the Roth IRA?



Submitted by David Mertz on Tue, 2023-05-30 13:10

  • The establishment date for a designated Roth accounts in a 401(k) does not transfer to the Roth IRA.  If the Roth IRA established by these rollovers is the client’s first Roth IRA, the 5-year qualification period for the client’s Roth IRAs will be the beginning of the year in which the first rollover deposit into the Roth IRA is made.
  • Generally, contribution basis and In-plan Roth Rollover basis in a designated Roth account in a 401(k) become contribution basis and conversion basis, respectively, in the Roth IRA.  However, if a designated Roth account is qualified, the entire amount rolled over to the Roth IRA from that account becomes contribution basis in the Roth IRA.  If the client is over age 59½, any of the designated Roth accounts established prior to 2019 would now be qualified in 2023.

Add new comment

Log in or register to post comments