Authors: Lou T. Mazawey, David W. Powell and David N. Levine

Date: 2/1/06

The IRS recently issued proposed and final regulations that provide guidance on the requirements applicable to Roth contributions under Code section 402A. 71 Fed. Reg. 6 (Jan. 3, 2006) and 71 Fed. Reg. 4320 (Jan. 26, 2006). The final regulations provide guidance on the requirements applicable to Roth contributions to 401(k) plans. The proposed regulations provide guidance on the taxation of distributions from Roth accounts, Roth account recordkeeping and reporting requirements, and Roth contributions to 403(b) plans.

The final regulations apply on and after January 1, 2006. The general effective date of the proposed regulations would be January 1, 2007, although a number of provisions would apply as of January 1, 2006. Taxpayers may rely on the proposed regulations until final regulations go into effect. Comments on the proposed regulations should be submitted by April 26.