Can I transfer a Roth IRA to 401k or Solo 401k?

October 7, 2014 | By Mark Nolan

QUESTION: I want to transfer my Roth IRA with Equity Trust to your solo 401k. Can you please provide guidelines for processing it as a direct rollover?

Regards, Dawn in FL

ANSWER: While the 401k regulations allow for annual Roth 401k contributions, the regulations do not permit for the transfer of Roth IRA funds to a 401k, whether a 401k for the self-employed such as a solo 401k, or a traditional 401k for full-time employees. Moreover, the regulations further restrict the transfer of a Roth IRA to the designated Roth account portion of the 401k (commonly referred to as a ROTH Solo 401k or Roth 401k).

The restriction with respect to not being allowed to transfer or direct rollover a ROTH IRA to a 401k is listed in IRS Publication 590-A. CLICK HERE to read about this restriction.

QUESTION:

I was under the impression that if the roth money is originally from a qualified plan it can still be contributed to the solo 401K, but it if it a native ROTH IRA at origin it could not.

Is that not correct?

ANSWER:

Even if the Roth IRA had been funded/ opened via a direct rollover from a previous employer plan such as a Roth 401k or Roth 457b, for example, the Roth IRA cannot later be transferred to a qualified plan including a roth 401k such as a roth solo 401k.

Essentially, once the funds are in the Roth IRA, the Roth IRA rules apply.