Designated Roth Accounts

[Felicia]

Are there any mandatory withholding requirements on Designated Roth Accounts? If so, where would I find them?

[Felicia]

A plan provides for designated Roth accounts. Since assets have not been held in a designated Roth account for 5 years there would be no qualified distribution. If a participant wants to take a distribution from this account, would the distribution be subject to any mandatory witholding requirements? If so, where would I find them?

[masteff]

http://www.irs.gov/pub/irs-pdf/i1099r.pdf

They don't make it 100% clear... I'd say you withhold, but only on the portion that represents earnings and then only if it's a rollover eligible distribution. In the above link, see the example in the 2nd column on page R-7. Also note the caution on page R-4 about needing to update your 402(f) notice for distributions from designated Roth accounts despite the IRS having not issued a new model yet.

Also see page 21-22 here: http://www.irs.gov/pub/irs-pdf/p15a.pdf

[Tom Poje]

that would be my understanding as well - the earnings are subject to taxation (so I would assume withhoding) - and also the earnings are subject to 10% early withdrawal if applicable.