Does this indirect 60-day 401k rollover to Roth IRA break any IRS rules?

[MrER]

Hi All

Does this indirect 60-day 401k rollover to Roth IRA break any IRS rules?

Specifically, does it break any IRS rules if:

1. The 60-day rollover check is cashed before put into the Roth IRA?
   
   
2. The rollover comes from 401k “after-tax account” contributions and taxable-earnings on those after-tax-contributions?
   (NOT From a 401k Designated Roth Account. It’s just a regular 401k that also has a separate account for “after-tax-contributions” and their taxable earnings.)
   
   
3. The IRS rollover chart does NOT list “after-tax” as an allowed rollover?
   https://www.irs.gov/pub/irs-tege/rollover_chart.pdf
   
   
4. The 20% withholding is “made-up-for" by taking money from a savings account so the amount being rolled over is the same as the 401k withdrawal distribution amount?
   

Here's a picture of the generic situation:

Any insights would be greatly appreciated!

 

[Morgan22]

It shouldn't be a problem from what I understand. I've done the same where I rolled over my after-tax contributions to my Roth IRA.

The 1099-R will just look a little different than a regular 401k to tIRA rollover. Box 1 will show the distribution amount as usual. But Box 5, labelled "Employee contributions/Designated Roth contributions", will also be filled in with the distribution amount. And Box 7 will show a code of 1.

I haven't had any issues with entering this info into my tax software either. Went through fine as expected.

And my employer plan did not withhold 20%. Hopefully yours does not either.

Edit: Any earnings were in the pre-tax bucket, therefore I just rolled those over to my rollover tIRA.

 

[daver]

Its my understanding the whole 53K can't end up into the ROTH. The earnings/gains need to go into the tIRA. So 30K to ROTH, 23K to pretax tIRA. But let someone else confirm...