The Internal Revenue Service has issued guidance on in-plan Roth Individual Retirement Account rollovers, that is, rollovers within a retirement plan to designated Roth IRAs in the same plan.
Section 402A of the Tax Code sets out the rules for designated Roth contributions. A qualified distribution from an employees designated Roth account is excludable from gross income. A distribution from an employees designated Roth account that is not a qualified distribution is includible in gross income in proportion to the employees investment in the contract (basis) and earnings on the contract.
