BG5150 Posted March 10, 2021 Posted March 10, 2021 I was looking over some correspondence that a national carrier put together for sponsors to send HCEs before they get ADP refunds. One of the blurbs says that Roth excess contributions are not taxable, and pre-tax contributions are taxable. But it also says that the earnings on BOTH Roth and pre-tax contributions are always taxable. Is that true? Even if the Roth account is eligible for a qualified distribution (ie the 5-yr rule was satisfied)? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
duckthing Posted March 10, 2021 Posted March 10, 2021 That's correct. Corrective distributions to correct 415, 402(g), or ADP/ACP failures cannot be qualified distributions. https://www.irs.gov/retirement-plans/retirement-plans-faqs-on-designated-roth-accounts Luke Bailey, hr for me, JOH and 1 other 4
BG5150 Posted March 10, 2021 Author Posted March 10, 2021 Thanks! QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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