Roth Employer Matching Contributions Trigger 1099-R Reporting

Post SECURE Act 2.0, employees are entitled to elect to have their employer matching contributions made to a Roth account instead of electing a traditional pre-tax contribution. For reporting purposes, the IRS treats Roth employer matches as though they were in-plan rollovers (meaning that the IRS treats the contribution as though the employee elected to convert traditional funds to a Roth account). The same is true for SEP IRAs and SIMPLE IRAs—the IRS continues to treat the transaction as though the funds were contributed to the IRA and immediately converted to the Roth in a taxable transaction. The 1099-R will be issued with respect to the year the employer matching contribution is actually deposited into the account. Because employers have until their tax filing deadline to deposit the funds, that means the 1099-R may be issued for the year after the year to which the contribution relates. For more information on the rules applicable to in-plan rollovers, visit Tax Facts Online. Read More: Link to Q3792. Note: Q is updated.