It depends on who contributed the $4000. If this is the amount you contributed to a Roth 401K, you wouldn't have to pay taxes on the $4000 that you contributed, because, since you are making a Roth-to-Roth rollover, you have already paid the taxes on this contribution. However, if you are rolling over company matches and earnings, that is another story. Your company matches and earnings are not in a Roth, but rather considered in a Traditional 401K. So if you roll these over to a Roth IRA, you will pay tax on the distribution, because you are changing the status of the deductions from deductible from income and tax-deferred growth to a taxable distribution and tax-exempt growth.
Please click on this link to see the IRS' answer to the question: Can my employer match my designated Roth contributions? Must my employer allocate the matching contr...
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