Can employee participant in both tradtional and roth 401k at same time? If yes, is there IRS cap for roth 41k like 19k cap from tradtional 401k ?
There is just one cap (annual elective deferral limit) of $19,000 (with an additional $6,000 if the employee is age age 50 or over) for 2019.
An employee can designate part of or all of the elective deferral (within the $19,000 annual elective deferral limit) as after tax Roth contributions. The designated Roth contributions must be maintained in a separate Roth account from traditional deferrals, The Roth deferrals are not excluded from the employee's gross income,
The annual deferral limit applies to all elective deferrals for the employee, both traditional and Roth.
Per IRS Publication 560, Designated Roth contributions are treated the same as pre-tax elective deferrals for most
• The annual individual elective deferral limit (total of all designated Roth contributions and traditional, pre-tax elective deferrals) of $18,500 for 2018 and $19,000 for 2019, with an additional $6,000 if age 50 or over;
• Determining the maximum employee and employer annual contributions of the lesser of 100% of compensation or $55,000 for 2018 ($56,000 for 2019);
• Nondiscrimination testing;
• Required distributions; and
• Elective deferrals not taken into account for purposes of deduction limits.
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