I reached 72 in year 2022 and had 401K and Roth 401K with my former employer. As I was not aware of Roth 401K RMD requirement, I did not do any rollover prior to age 72. Therefore, my former employer processed my RMD in 2022. Just wish I was born 1 year later, so I don't have to deal with this nightmare with the just signed Secure Act 2.0
Please enlighten me how the RMD on 401K and Roth 401K should be processed.
Below were what my former employer did on my first RMD on 2022:
1. My former employer calculated the combined RMD from both Roth 401K and 401K and made it one RMD. The funding source for the only RMD cheque was from Roth 401K with IRS distribution code "B". I think this means I don't have to pay tax on this RMD. No record with IRS distribution code"7" for the taxable 401K distribution portion.
2. The remaining balance from Roth 401K after the RMD amount for both Roth 401K and 401K was taken, they sent me a direct rollover cheque for deposit into Roth IRA.
3. The total balance of my 401K was directly rolled over to my external IRA account. No RMD was taken from 401K, although it was included in the combined single RMD cheque(funding source was Roth 401K)
4. The Company has completely ignored my formal written request for explanation of this process on 12/9/2022. I had not received any response so far.
My questions:
1. Are above steps the correct way to process the RMDs for both Roth 401K and 401K? So I don't have to pay tax for my 401K RMD(no record with IRS distribution code "7"
2. There is no tax on qualified Roth 401K distribution. They took money out as RMD. I will lose future tax free growth from this excessive withdrawal for 401K RMD. What can I do to correct this?
3. What can I do to fix the taxable 401K RMD portion with no IRS distribution code "7" problem?
Thank you for your help.
Sara
