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Jimbo888
New Member

Does an employer Roth 401K match count as a contribution, earning, or neither?

Knowing this would affect the pro-rata calculation for early Roth 401K withdrawal.   In addition if you roll the Roth 401K into a Roth IRA to avoid the pro-rata calculation, this would affect how much money you can withdraw penalty free since you can always withdraw your Roth IRA contributions (not earnings) penalty-free.
1 Reply
dmertz
Level 15

Does an employer Roth 401K match count as a contribution, earning, or neither?

Employer matching contributions are not permitted to be Roth contributions.  Employer matching contributions are required to be pre-tax to the traditional account in your 401(k) and therefore have no effect on your Roth 401(k) contribution basis.

If you later do an In-Plan Roth Rollover (IRR) from the traditional account to the Roth account in the 401(k) plan, the amount of the IRR becomes part of your basis in IRRs.

https://www.irs.gov/retirement-plans/retirement-plans-faqs-on-designated-roth-accounts#irr12
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