Tuesday, November 30, 2010

IRS Notice 2010-84 –Guidance on In-Plan Roth Rollovers

Part III --- Administrative, Miscellaneous, and Procedural

This notice provides guidance under § 402A(c)(4) of the Internal Revenue Code, relating to rollovers from § 401(k) plans to designated Roth accounts in the same plan ("in-plan Roth rollovers"), as added by § 2112 of the Small Business Jobs Act of 2010 ("SBJA"), P.L. 111-240. The guidance in this notice also generally applies to rollovers from § 403(b) plans to designated Roth accounts in the same plan.

Answers for the following questions are provided in the notice:

  • What is an "in-plan Roth rollover"?
  • What amounts are eligible for in-plan Roth rollovers?
  • Is an in-plan Roth direct rollover treated as a distribution for all purposes?
  • Can a plan add an in-plan Roth direct rollover option for amounts that are not otherwise distributable under the terms of the plan but that would be permitted to be distributed under the Code if the plan so provided?
  • Must a plan that offers in-plan Roth rollovers include a description of this feature in the written explanation the plan provides pursuant to § 402(f) to an individual receiving an eligible rollover distribution?

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