Rollovers from employer plan to Roth IRAs

[Nassau]

Are pre-tax assets from a qualified plan permitted to be rolled over to another institution into a Roth IRA? If so, is this a taxable event or non-taxable?

Meaning, the financial institution that rolled over the pre-tax assets to the other institution are they required to withhold taxes at the time of the rollover? or does the participant have to notify the IRS that they rolled over pre-tax assets from a qualified plan into a Roth IRA at another institution and pay the taxes?

[masteff]

See Q&As 1 thru 7 in this Notice (#6 discusses withholding): http://benefitslink.com/src/irs/notice2008-30.pdf

Basically, from your perspective, it's a normal direct rollover.

As far as I can tell, the info in this older thread about the 1099-R reporting is still correct: http://benefitslink.com/boards/index.php?s...c=43334&hl=

[mbozek]

Are pre-tax assets from a qualified plan permitted to be rolled over to another institution into a Roth IRA? If so, is this a taxable event or non-taxable?

Meaning, the financial institution that rolled over the pre-tax assets to the other institution are they required to withhold taxes at the time of the rollover? or does the participant have to notify the IRS that they rolled over pre-tax assets from a qualified plan into a Roth IRA at another institution and pay the taxes?

If it is a direct rollover to a roth IRA there is no tax withholding but the employee is responsible for sufficient tax withholding or paying estimated taxes. An employee can avoid penalty for underpaying estimated tax by increasing w-2 withholding up to 12/31.

Indirect rollovers to a Roth IRA are subject to 20% withholding.