Regular EE & ER Contributions to Roth IRA

[Dazednconfused]

Participant is rolling out of a plan with regular deferrals & ER contributions and wants to rollover and convert to Roth IRA. I believe on the 1099-R I would report the gross distribution in box 1, taxable amount in 2a which would be gross distribution, in box 7 is a 'G', and in box 4 the amount of tax withheld.

Question is box 4 and withholding, can the participant elect no withholding or is there a 20% that must be withheld at the point of distribution? From what I have read I think that since it is a rollover they can elect no withhold does this sound correct.

It is way to early to think about 1099r's!

Thanks,

[GMK]

Tax withholding is voluntary on a rollover to a Roth IRA.

My recommendation is to rollover the entire distribution to maximize the amount going into the Roth. Any withholding (from the rollover) will reduce the participant's Roth balance but not her/his taxes. To avoid being under-withheld, the participant should instead consider increasing payroll withholding or estimated tax payments, if possible.