How are in-plan Roth rollovers taxed?
You generally include the taxable amount (fair market value minus your basis in the distribution) of an in-plan Roth rollover in your gross income for the tax year in which you receive it. However, special tax rules apply for in-plan Roth rollovers done in 2010. An in-plan Roth direct rollover is not subject to the mandatory 20% withholding. You may have to increase your federal income tax withholding or make estimated tax payments to avoid an underpayment of tax penalty. In-plan Roth rollovers are not subject to the 10% additional tax on early distributions.
