Roth 401k Employer Match

[neguy11]

I have a Roth 401K and know that Roth 401K earnings are tax free. Now my contributions are post-tax, but my employer match is not added to my income (I don't think). So does this mean that my employer match on my 401K is money that will never be taxed? Just want to make sure I won't get bit somewhere!

[sweeps]

Your match goes in pre-tax. You'll have to pay taxes on it later.

[Snave]

Good question b/c I have the same thing. This is the first year that my company offered a Roth 401K and when I went to sign up, there was a circle to select for 401k match or another for Roth Match. Which, didn't make sense b/c both would be pre-tax dollars, so why are there 2 different choices. I am still sure that the money goes in pre-tax, but need to call fidelity and confirm what the deal is.

[Dinadur]

I have a Roth 401K and know that Roth 401K earnings are tax free. Now my contributions are post-tax, but my employer match is not added to my income (I don't think). So does this mean that my employer match on my 401K is money that will never be taxed? Just want to make sure I won't get bit somewhere!

I am currently enrolled in a post tax Roth 401k plan as well and from my research I did prior to enrollment I found that employer contributions to Roth 401k plans are treated as pre-tax contributions and do not even get Roth status. As pre-tax contributions you will, of course, be required to pay taxes on both principal and gains upon withdrawal.

[buzz]

I am currently enrolled in a post tax Roth 401k plan as well and from my research I did prior to enrollment I found that employer contributions to Roth 401k plans are treated as pre-tax contributions and do not even get Roth status. As pre-tax contributions you will, of course, be required to pay taxes on both principal and gains upon withdrawal.

Please quote a reference, as this sounds inaccurate.

[safari]

Please quote a reference, as this sounds inaccurate.

This is from Wikipedia.

Employers are permitted to match contributions to a designated Roth account, but the matching funds must be made on a pre-tax basis, not be made into the designated Roth account, and cannot receive the Roth tax treatment. (Pub 4530)

That means that the employee will have two accounts - one Roth 401(k) for the employee after-tax contributions and one regular 401(k) for the company's pre-tax contributions.

[humandraydel]

You should've just listened to sweeps...

[sweeps]

You should've just listened to sweeps...

No one ever believes me.

[buzz]

This is from Wikipedia.

Employers are permitted to match contributions to a designated Roth account, but the matching funds must be made on a pre-tax basis, not be made into the designated Roth account, and cannot receive the Roth tax treatment. (Pub 4530)

Okay, my apologies. I completely missed that the claim was regarding matching funds only.

[humandraydel]

No one ever believes me.

Your answers are too short to appear credible.

[Gruntina]

This is from Wikipedia.

That means that the employee will have two accounts - one Roth 401(k) for the employee after-tax contributions and one regular 401(k) for the company's pre-tax contributions.

My company just recently added the Roth 401k and I have elected it. From my understanding from my HR and Fidelity(In my case) is that you do not need 2 separate accounts if you wish to have only Roth 401k with the matching contribution instead of a spit of both Traditional and Roth 401k. Fidelity use the term 'buckets" when flagging the amount of post tax and pretax amount in the Roth 401k account. Unfortunately the two "buckets" in one account are both labeled Roth 401k which makes it confusing. One bucket has the matching contribution amount which will be flagged for taxes when I hit retirement. Fidelity or any of the investment companies takes care of this calculation of this rather than the company you work for.