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Posted

With the new Roth Catchup Rules for Highly Paid Individuals starting next year, I am trying to make sure that I understand the Rules for recharacterization.  I understand that one of the methods for recharacterization is In Plan Roth Rollovers (if completed timely and the plan permits).  My question is this:  If a participant is under age 59.5, would this be done as an In Plan Roth Transfer and the 5-year recapture rule apply?  

 

 

 

Pamela L. Shoup CEBS, RPA, QKA

 

Posted

@Pam Shoup The guidance provides two correction methods:

W-2 correction can be used as long as the participant's W-2 has not been filed or furnished to the participant

In Plan Roth Rollover correction.  The guidance includes a reference to previous guidance on In-Plan Roth Rollovers:

Quote

The provisions of Notice 2010-84, 2010-51 IRB 872, and Notice 2013-74, 2013-52 IRB 819, would generally apply to an in-plan Roth rollover used to correct a section 414(v)(7) failure.

With that in mind, I believe the answer to your question is Yes. 

 

 

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