After-tax Contributions/ Rollover

[Guest Laura Millwood]

If a person wants to roll over their account balance (which contains a large after-tax balance) from one 401(k) plan to another (that does not allow for after-tax contributions), what are their options? If the person rolls, are they forced to take a distribution of their after-tax contributions? Would this be subject to the 10% early distribution penalty? Any comments appreciated.

[Guest Beavis]

After tax contributions can not be rolled over. The individual will have to receive a cash distribution of their post tax contributions (basis). The 10% excise tax only applies to distributions that are includible in income. Since this will be a non-taxable distribution, the excise tax will not apply.

The earnings on post tax contributions may be rolled over.