Nov 17

When Are Roth Solo 401(k) Distributions Taxed?

When Are Roth Solo 401(k) Distributions Taxed?Generally, distributions from a designated Roth Solo 401(k) account are excluded from gross income if they are (1) made after the employee attains age 59 1/2 , (2) “attributable to” the employee being “disabled,” or (3) made to the employee’s beneficiary or estate after the employee’s death. However, the exclusion is denied if the distribution occurs within five years after the employee’s first designated Roth contribution to the account from which the distribution is received or, if the account contains a rollover from another designated Roth account, to the other account. Other distributions from a designated Roth account are excluded from gross income under Internal Revenue Code 72 only to the extent they consist of designated Roth contributions and are taxable to the extent they consist of trust earnings credited to the account.

Please contact one of our 401(k) Experts at 800-472-0646 for more information.

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