@esarnc , any amount of an In-Plan Roth Rollover from the after-tax account is a proportionate mix of after-tax basis and pre-tax earnings and it all ends up in the designated Roth account. Whatever portion of the IRR is from pre-tax funds (earnings) will be taxable.
Be aware that the MAGI for a Roth IRA contribution subtracts from AGI the amount of taxable rollovers to a Roth IRA but does not subtract the taxable amount of an IRR, so this could have an effect on the amount you our your spouse is eligible to contribute to a Roth IRA. Also, the ordering rules for distributions from a Roth IRA do not apply to distributions form designated Roth account in the 401(k). Distributions from the designated Roth account in the 401(k) before the account is qualified, should you make any, are a proportionate mix of nontaxable after-tax funds and taxable earnings.
