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Posted

A client defers $23,500 as Roth in 2025 and will have an employer contribution of $46,500 ($10,500 SH nonelective and $36,000 PS.) Can he elect Roth on a portion of his employer contribution or does it have to be the entire money source for that year?  Example - he might want to have $20,000 of his employer made as Roth.  Seems that should be possible with an election form. I realize the Roth conversion option may be a better and simpler option.  

Thank you,

Tom

Posted
1 hour ago, Tom said:

Can he elect Roth on a portion of his employer contribution or does it have to be the entire money source for that year? 

It depends on the plan document and administrative procedures.  For our plans, participants have the ability to change between pre-tax and Roth ER at any time, just like they can for their employee contributions.  

 

 

Posted

What do the documents governing the plan provide?

Or, if not yet amended to provide that a participant may elect that a nonelective contribution be treated as a Roth contribution, what does the plan’s sponsor want the remedial amendment to provide?

And if the plan’s sponsor expects to use IRS-preapproved documents, which choices will those documents allow?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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