A designated Roth account is a separate account in a 401(k), 403(b) or, after 2010, a governmental 457(b) plan that holds designated Roth contributions. Designated Roth contributions are elective deferrals that the participant elects to include in gross income. The plan must keep separate accounting records for all contributions, gains and losses in the designated Roth account.
A SARSEP or SIMPLE IRA plan may not offer designated Roth accounts.
Qualified distributions from a designated Roth account are excludable from gross income. Generally, a distribution qualifies for income exclusion if it occurs more than five years after the initial contribution to the account and is made after the participant reaches age 59½, dies or becomes disabled.
