IRS Issues Final Regulations for Designated Roth Contributions

December 30, 2005 – The IRS today issued final regulations for designated Roth contributions under qualified cash or deferred arrangements described in IRC Sec. 401(k). Designated Roth contributions were introduced by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), and fall under IRC Sec. 402A.

Beginning in 2006, plan permitting, designated Roth contributions can be made under both IRC Sec. 401(k) plans and tax-sheltered annuity plans under IRC Sec. 403(b). The final regulations issued today apply to IRC Sec. 401(k) plans. IRS sources have said, however, that additional guidance applicable to designated Roth contributions to 403(b) plans is forthcoming.

A link to the final Roth 401(k) was not immediately available.