There are specific IRS regulations that govern rollovers from designated Roth IRA accounts to multiple qualified plans. This is a somewhat complex retirement rollover option, so it is important for taxpayers to understand the process.

The IRS has released the rules, effective January 1, 2016, for disbursements from a “designated Roth account” that is directly rolled over to qualified plans established under section 401(a), section 403(b), or section 457(b).  Under these rules, if disbursements are made from a taxpayer’s designated Roth account to the taxpayer and also to the taxpayer’s Roth IRA or designated Roth account in a direct rollover, then pretax amounts will be allocated first to the direct rollover, rather than being allocated pro rata to each destination. Also, a taxpayer will be able to direct the allocation of pretax and after-tax amounts that are included in disbursements from a designated Roth account that are directly rolled over to multiple destinations, applying the same allocation rules to distributions from designated Roth accounts that apply to distributions from other types of accounts as discussed next (T.D. 9769, IRB 2016-23, 6/6/16).