With my previous employer, I had been contributing to a Roth 401k account and also receiving an employer match that went into a traditional 401k. After leaving the company, the money was automatically mailed to me as 2 separate checks, both made payable to me. The Roth contribution was the larger check and minimally taxed (1% withheld), and the employer match was a smaller amount and taxed at 20% withholding. I would like to do an indirect rollover to my Roth/traditional IRAs respectively, within the 60 days of withdrawal. I will make sure to put back the amount withheld from each check. My question is- am I allowed to do a rollover for each one of these checks as they will be done in the same year? I am being told that only one check can be a rollover, and the other will have to be done as a contribution. My concern with doing the latter is facing penalties, including an early withdrawal penalty. I want to avoid any penalties and unnecessary taxes.
1. Can I do both checks as rollovers?
2. If one check has to be invested as a contribution, which of the two is better to do that way?
2a. Will there be a penalty for doing this?
