Secure 2.0 Question

Under the provision of the Act dealing with the ability to get ER Roth Matching Contributions, is the employee taxed on the match immediately?  If so, what happens if the funds are not vested at the time the employee leaves employment?  Is there a deduction, would they amend their return, etc.?  Or am I missing the mark on the fact that they would be immediately responsible for the tax?  Any help greatly appreciated.

Under the Act, ROTH contributions must be fully vested. Just another delightfully administrative thing to track for Plans that allow employees to elect employer contributions be made as ROTH.

It is the same as doing an in-plan Roth conversion, which has been around for a number of years. Either immediately, or at the end of the year, depending on the service provider, they will receive a 1099-R showing the amount as taxable. The 1099-R would be for the year in with the deposit occurs. If the deposit of Roth Employer Match occurs in 2025, they receive a 2025 1099-R and use that tax form when they prepare and file their personal return in early 2026. 

For good reason - all the plans I've seen that allow for in-plan Roth conversion, restrict them and only allow it from 100% vested monies. The same will be the case for employer contributions that the participant elects as Roth. If a participant is not 100% vested in those dollars at the time they are contributed, they would not be eligible to go in as Roth dollars.