After Tax Contributions to Thrift Eligible to Roth IRA Conversion?
Are contributions into a qualified plan which are made after tax eligible to be converted or rolled over to a Roth IRA? If so, are there any special procedures for doing so? If the employer does not report basis is three a way to calculate it?
Permalink Submitted by Alan - IRA critic on Tue, 2014-01-14 22:03
Yes, these can be converted to a Roth IRA. There have been several discussions here and you might do a search under “isolation of basis”. The employer must track the amount of after tax contributions made, and the employee needs to determine if the plan considers these contributions to be made to a separate after tax sub account which can be distributed separately along with the earnings on that account. If so, the distribution will have a limited amount of earnings included, but even then there are ways to roll the earnings to a TIRA and only the after tax amount to a Roth IRA in a tax free conversion.