Employer Match as Roth - As Per Secure 2.0

[metsfan026]

I have a client asking about the mechanics of making the employer matching contribution as Roth, as allowed under Secure 2.0.  In particular how the taxes are being handled.  Is the Match being put through payroll, or are companies paying the taxes independently?

[C. B. Zeller]

We don't know yet. IRS has not issued any instructions on this.

My advice to anyone who wants to do this, is to do an in-plan Roth conversion instead. You will get the same tax result through a well-understood process.

[RatherBeGolfing]

16 minutes ago, metsfan026 said:

I have a client asking about the mechanics of making the employer matching contribution as Roth, as allowed under Secure 2.0.  In particular how the taxes are being handled.  Is the Match being put through payroll, or are companies paying the taxes independently?

I agree with CB, I wouldn't recommend this until we have guidance.  No telling when that will be.

[Ilene Ferenczy]

Just to add my voice to this, we have strongly recommended to our clients that they do not do anything in relation to this until guidance comes.

[metsfan026]

Thanks everyone!  Just wanted to followup, I know there was some guidance that came out so I wanted to check.

Thanks everyone!

[Belgarath]

Not wages, and not reported on W-2. Reported an a 1099-R, Boxes 1 and 2a, code "G" in Box 7. Now, employee might want to increase normal wage withholding to take all this into account, but that's a separate issue. 

Take a look at IRS Notice 2024-2, Q & A's L-1 through L-11 for a discussion of the issue.