The TaxStache Toolkit
Is your 401(k) match taxed now?
Two quick questions about your plan.
Does your plan let you elect Roth tax treatment for the employer match — and did you elect it?
One more thing
Are you fully vested in your employer's contributions?
Estimate this year's tax cost
Your match is going into the plan pre-tax, same as the default rule for almost every 401(k). It grows tax-deferred and isn't taxed until you take it out in retirement.
Plans require full vesting before you can elect Roth treatment on a match. Until you're vested, this is a moot point — your match sits pre-tax like a standard match. Revisit this once you're fully vested.
You elected Roth treatment, so this match is reported on Form 1099-R and taxed as income this year. In exchange, it grows and comes out completely tax-free in retirement — no tax bill waiting for you later.