Permalink Submitted by Alan Spross on Tue, 2011-01-11 00:19
Yes, you can convert up to the amounts the plan adopts as eligible for the new “in plan” Roth conversions into their designated Roth option. But you must be sure you want to incur the tax liability because these “in plan conversions” cannot be recharacterized for any reason. Also, note the designated Roth accounts have different tax rules than Roth IRAs. For example, they are subject to RMDs at age 70.5, and if you distribute funds before the designated Roth is qualified, a pro rate portion of each distribution is taxable if there are earnings in the account. Roth IRA ordering rules do not apply.
Permalink Submitted by Alan Spross on Tue, 2011-01-11 00:19
Yes, you can convert up to the amounts the plan adopts as eligible for the new “in plan” Roth conversions into their designated Roth option. But you must be sure you want to incur the tax liability because these “in plan conversions” cannot be recharacterized for any reason. Also, note the designated Roth accounts have different tax rules than Roth IRAs. For example, they are subject to RMDs at age 70.5, and if you distribute funds before the designated Roth is qualified, a pro rate portion of each distribution is taxable if there are earnings in the account. Roth IRA ordering rules do not apply.