Partial 401k Rollover

Submitted by Kevin Campbell on Fri, 2023-01-06 03:49

I have pre-tax contributions and Roth In-Plan Conversion contributions in an old 401k. When I do a partial rollover online the only source available is the pre-tax source. There is a note saying that I may be able to request specific sources if I call them. The person on the phone wasn’t sure if I could roll just the Roth portion into a Roth IRA.

Can I roll the 401k Roth funds into a Roth IRA without any tax consequences? Or is it pre-tax first, or pro-rated?



Submitted by Alan - IRA critic on Fri, 2023-01-06 04:09

  • Rolling your Roth 401k balance into a Roth IRA has no current tax consequences, but you must update your Roth IRA basis accounting. If the Roth 401k is not yet qualified, the amount of your contributions and in plan Roth conversions is added to your Roth IRA regular contribution basis. If the Roth 401k balance exceeds that basis due to gains, the gains become Roth IRA gains. If the Roth 401k is qualified (5 years and 59.5) then the entire balance is treated as Roth IRA regular contribution basis. If the Roth IRA is qualified, then the entire Roth 401k balance is also qualified.
  • Plan provisions determine whether you must take a lump sum distribution or if you can roll out just the Roth portion.

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