NUA from an old 401k

Submitted by Roselyn Siino on Tue, 2023-01-24 17:58

Is the option of NUA on the table if the 401k account owner died and it has been more than a couple of years before the beneficiaries decide to roll it over? The 401k plan administrator is telling them that NUA is not an option. Thanks



Submitted by David Carrell on Tue, 2023-01-24 21:38

  • Of course all specific details can be critically important. But it is my understanding that “death” is a “triggering event”.
  • There could be other reasons the NUA is now not an option. One (likely?) possibility is any other intervening activities which are now precluding complete distribution within single tax year.

Submitted by Alan - IRA critic on Tue, 2023-01-24 21:50

I agree. While the plan administrator should be able to explain their position, if any prior distribution was taken from the plan after owner’s death and prior to 2023, such distribution would be an “intervening distribution” that would disqualify a 2023 LSD from being NUA eligible. Distributions taken before death are not relevant.

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