Mega Backdoor Roth Limitation
Hi- I have been making contributions into an after tax bucket of my qualified plan in adherence to plan and IRS 415 limits for a few years. I have not been making the in plan conversion from the after tax bucket which now has accrued some earnings (this portion will be taxable). I plan to begin making these conversions on subsequent after tax contributions immedietley once contributed.
Question:
If I have $100K in the after tax bucket may I make a full in plan conversion of this bucket to the Roth 401k? I have been seeing mixed articles that seem to limit the in plan conversion to the 415 contribution limits. My understanding was that the conversion step has no limit much like any other Roth conversion outside of qualified plans. Insight is appreciated.
Permalink Submitted by David Mertz on Wed, 2024-01-24 13:27
There is no statutory limitation on In-plan Roth Rollovers. Plan permitting, you can roll over to the designated Roth account in the 401(k) as little or as much from the after-tax sub-account as you like. The rollover will be a proportionate mix after-tax and taxable pre-tax amounts. Section 415 limits contributions, not rollovers.