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This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/js2288.htm
WASHINGTON, DC -- The Department of Treasury and IRS today announced
proposed regulations regarding designated Roth contributions to 401(k)
plans. Roth contributions, which were created in the Economic Growth
and Tax Relief Reconciliation Act of 2001 (EGTRRA), will allow for
employees to designate all or a portion of their 401(k) employee
deferrals on an after-tax basis. Most distributions of the amount
contributed as well as any earnings on those contributions will be
tax-free.
Although Roth contributions are not effective until taxable years
beginning after December 31, 2005, many plan sponsors are interested
in amending their plans and establishing procedures for administering
these accounts. Releasing these proposed rules at this time will
enable Treasury and the IRS to finalize the rules in time for plan
sponsors to implement this valuable retirement savings opportunity
beginning in 2006.
Similar rules will apply to Roth contributions available under 403(b)
plans sponsored by tax exempt organizations and public schools.
The text of the proposed regulations
http://www.treas.gov/press/releases/reports/rothproposed.pdf
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