My first Roth distribution!
Participant became eligible to enter the plan on 1/1/2009 and elected to make Roth deferrals which totaled $210. Needless to say, she terminated in 2009, and is now requesting a lump sum distribution. She is 42 years old. Her earnings on the Roth deferrals are $30.72. Am I taxing the whole thing or just the earnings, or nothing, since the earnings are so small (assuming that only the earnings should be taxed). She does have a profit sharing allocation that will get taxed, but I wasn't sure about the Roth part, since she has not met the 5 year requirement.
I am thikning that the earnings are what's to be taxed; since she has $2082.23 vested balance in the P/S, do I lump the earnings in with that and take the 20%?
Full Version: Roth 401(k0 distribution - tax?
QUOTE (doombuggy @ Mar 3 2010, 09:29 AM) 
My first Roth distribution!
Participant became eligible to enter the plan on 1/1/2009 and elected to make Roth deferrals which totaled $210. Needless to say, she terminated in 2009, and is now requesting a lump sum distribution. She is 42 years old. Her earnings on the Roth deferrals are $30.72. Am I taxing the whole thing or just the earnings, or nothing, since the earnings are so small (assuming that only the earnings should be taxed). She does have a profit sharing allocation that will get taxed, but I wasn't sure about the Roth part, since she has not met the 5 year requirement.
I am thikning that the earnings are what's to be taxed; since she has $2082.23 vested balance in the P/S, do I lump the earnings in with that and take the 20%?
Participant became eligible to enter the plan on 1/1/2009 and elected to make Roth deferrals which totaled $210. Needless to say, she terminated in 2009, and is now requesting a lump sum distribution. She is 42 years old. Her earnings on the Roth deferrals are $30.72. Am I taxing the whole thing or just the earnings, or nothing, since the earnings are so small (assuming that only the earnings should be taxed). She does have a profit sharing allocation that will get taxed, but I wasn't sure about the Roth part, since she has not met the 5 year requirement.
I am thikning that the earnings are what's to be taxed; since she has $2082.23 vested balance in the P/S, do I lump the earnings in with that and take the 20%?
The earnings on the Roth benefits are taxable because the 5 year rule has not been met and the money is not being rolled over.
I would lump the Roth earnings in with the P/S, and then determine the 20% withholding.
that is what I was thinking too, once i merged the two in my head. The earnings and the P/S portion I have listed as a code 1 for the 1099-r, but the $210 that she had as basis - is that a code B? I still think of the "B" for beneficiaries.... 
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