msimpson Posted May 7, 2015 Share Posted May 7, 2015 Rev. Rul. 69-277 says it's okay to distribute voluntary after-tax contributions from a qualified plan at any time. This still appears to be good law, as it is cited as recently as in Notice 2004-12. How does this interplay with IRS Notice 2014-54? If a plan has both pre-tax and after-tax amounts in it, can a participant withdraw just the voluntary after-tax contributions? Or does 2014-54 require that any distribution (even if no "distributable event," meaning they are still employed, not over 59-1/2, etc.) be a pro rata mix of pre-tax and after-tax? I keep thinking there must be some way to withdraw just the voluntary after-tax, otherwise 69-277 is useless, but can't figure it out. Does it hinge on a "distributable event" issue? Any help would be appreciated! Link to comment Share on other sites More sharing options...
QDROphile Posted May 7, 2015 Share Posted May 7, 2015 Post-1986 non-Roth after-tax contributions are treated as a separate contract under section 72. Any distribution of the after-tax amount will include a pro-rata share of earnings and the earnings are taxable. Link to comment Share on other sites More sharing options...
msimpson Posted May 7, 2015 Author Share Posted May 7, 2015 Thank you. Can you tell me what part of 72 covers this? I'm trying to wrap my head around the legal authorities to make sure I understand the reasoning. Also, in the scenario I'm thinking of, the after-tax amounts will likely be distributed without any earnings. (They were a failed/incomplete attempt to purchase additional service credit in a governmental DB plan.) Link to comment Share on other sites More sharing options...
QDROphile Posted May 7, 2015 Share Posted May 7, 2015 I had in mind section 72(d)(2), but that may not fit your circumstances. I did not check the rulings you cited for context. Section 72(d) is applicable generally to qualified plans. Link to comment Share on other sites More sharing options...
msimpson Posted May 7, 2015 Author Share Posted May 7, 2015 Again, thank you. I'll take a look at that and see if I can make it all make sense. Link to comment Share on other sites More sharing options...
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