Thanks to the Pension Protection Act (PPA) of 2006, 401k plans including solo 401k plans may allow for Roth 401k contributions (also known as a Roth contribution program) that allows solo 401k participants to treat their employee solo 401k contributions as Roth solo 401k contributions.
The regulations also allow for individuals to transfer their former employer Roth 401k funds, Roth 403(b), or Roth governmental 457(b) to a Roth Solo 401k.
Before accepting a Roth 401(k) transfer, Roth 403(b) transfer or a 457(b) transfer, the solo 401k trustee should understand the following:
- A Solo 401k plan cannot accept rollovers of Roth 401k, 403b or 457b funds (also know as designated Roth account funds) unless the solo 401k plan permits participants to make Roth solo 401k elective deferrals.
- Roth 401(k), Roth 403(b) and 457(b) accounts may be directly rolled over to a solo 401k retirement plan that has a designated Roth 401k program. IMPORTANT NOTE: A ROTH IRA may not be transferred to a solo Roth 401k.