Beginning after the 2022 tax year, employers that had established either a SEP-IRA or SIMPLE IRA plan that they funded annually for themselves as well as for their employees are now allowed to fund the retirement contributions into a Roth account for themselves and their employees. The Roth funding also includes the employer matching and nonelective contributions funded for employees that choose to designate the employer portion of the retirement contribution to be contributed into a Roth account. For plans that allow employees to designate the employer match and nonelective contributions into a Roth IRA account, this funding is taxable income for the employee. Employer contributions funded into an employee designated Roth IRA account will be reported as taxable income to the employee and reported on a Form 1099-R.
