Another question for you dmertz.
Back in the summer of 2018, I rolled over a Roth 401k from a previous employer into a Roth IRA. My intent was not to create a taxable event. However, I didn’t realize tax hadn’t been taken on the employer portion of the Roth 401k, so I was surprised to learn I owed tax on the employer contribution portion as I was doing my 2018 return. My question is whether in your opinion, a Roth is considered an eligible retirement account under Section 3c of Revenue Proclamation 2016-47 which states, “the distribution was deposited into and remained in an account that the taxpayer mistakenly thought was an eligible retirement plan.”
If a Roth IRA is considered an eligible retirement account, then I would assume I need to go ahead and pay the tax. If a Roth IRA is not an eligible retirement account, then my assumption is that I might qualify for this reason under the self-certification process.
What is your opinion? Have you seen this situation when a Roth 401k is rolled over to a Roth IRA and creates an unintentional tax liability? Do you think this situation would qualify for a self-certification waiver or not? Any thoughts you have would be welcome.
