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In-Plan Roth Rollovers Expanded

For the past few years, plans with designated Roth accounts could allow an individual to roll over an amount from a non-Roth account into the individual’s designated Roth account in the same plan, but only amounts the individual could have had distributed from the plan, usually because the individual had attained age 59½ or had severed from employment. 

Beginning in 2013, a 401(k) plan can permit this type of rollover for an amount that is not eligible for distribution at the time of the rollover, such as an amount in an individual’s regular (pre-tax) elective deferral account when the individual is not eligible for a distribution from that account. 

A similar expansion applies to 403(b) plans and governmental 457(b) plans. The amendment to the in-plan Roth rollover rules was made by the American Taxpayer Relief Act of 2012. The IRS anticipates issuing guidance later this year about the expanded in-plan Roth rollovers.

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Page Last Reviewed or Updated: 10-Oct-2014