Menu Close

What is a Designated Roth Contribution to a 401(k) Plan?

A designated Roth contribution is a type of elective deferral that an employee can make to a §401(k) or 403(b) plan.

With a designated Roth contribution, the employee irrevocably designates the deferral as an after-tax contribution that the employer must deposit into a designated Roth account. The employer includes the amount of the designated Roth contribution deferral in the employee’s gross income at the time the employee would have otherwise received the amount in cash if the employee had not made the election. It is subject to all applicable wage-withholding requirements. The law does not allow designated Roth contributions in SARSEP or SIMPLE IRA plans.

Share the knowledge
Posted in 401(k)

Leave a Reply