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Roth 401k with Employer Contributions - When taxed?
I rolled over my Vanguard Roth 401k into a Schwab Roth IRA in August 2024. Vanguard’s Disbursement Confirmation Letter clearly distinguished my post-tax employee contributions as non-taxable, and my employer’s pre-tax contributions as being taxable as ordinary income.
My question is: When is the employer contribution taxed? Upon rollover into a different Roth account (2024 taxes) or when it is ultimately withdrawn many years from now?
The 1099-R that I received from Vanguard shows the full amount as Gross Distributions and declares there is no amount taxable. When I asked Schwab, they said the employer’s contributions were in effect converted upon the rollover and were taxable now, while Vanguard states a roll-over is a roll-over and there was no taxable event. There is very little information online, and it is somewhat contradictory.