I retired a few years ago, and am thinking about starting a SEPP next year when I turn 55. I intend to take these distributions from my Traditional (before tax) 401k. I also have a Roth 401k that I would like to continue performing annual rollovers to my Roth IRA. Both the Traditional 401k and Roth 401k are from the same employer managed by the same provider. The provider has told me that they consider both 401k’s to be in the same account. The statements show a total for both accounts, but do break out the before tax and Roth components. Additionally, I can specify distributions from either 401k source. The provider has told me that any distributions from the traditional 401k source would be coded “1” in box 7 of the 1099. In the past, distributions from Traditional 401k and rollovers from Roth 401k have separate 1099’s with unique “account numbers” for each transition.
My understanding is that the IRS specifies that “a designated Roth account is a separate account”. So, despite that the service provider says the 401k’s are one account, will distributions from Roth 401k bust a SEPP from Traditional 401k? I understand that this question could be avoided by rolling the Traditional funds into an IRA, but I prefer to keep the accounts with the same service provider.
