Can I convert a 401(k) Plan to a Roth 401(k) Plan?
Yes. The Small Business Jobs Act of 2010, signed by President Obama contained a little-known provision, which went to affect on Sept. 27, 2010, allowing for the conversion of a traditional 401(k) or 403(b) account to a Roth in the same plan if their employer offers one. However, the 401(k) Plan participant (employee) must pay income tax on the amount converted. Once the funds have been converted to the Roth 401(k) plan sub-account, as long as the plan participant is above the age of 59/1/2 and the Roth 401(k) account has been opened at least 5 years, all income and gains from the Roth 401(k) plan investment would be tax-free.