what you are looking for is an in-plan conversion
A plan with a designated Roth program can allow rollovers to a
designated Roth account from another account in the same plan (an
“in-plan Roth rollover”). Designated Roth accounts can’t be set up
solely to accept in-plan rollovers - they must also accept elective
deferrals from participants.
So this means your employer may allow an in-plan conversion.
Amounts eligible for in-plan Roth rollovers
Any vested plan balance, including earnings, can be rolled over to a
designated Roth account. The amount doesn’t have to be eligible for
distribution; however, the rollover must be direct (not a 60-day
rollover) if the amount is not otherwise eligible for distribution.
A plan can allow in-plan Roth rollovers of:
- elective salary deferrals
- matching contributions
- nonelective contributions
- after-tax employee contributions
- amounts rolled into the plan from another plan
- qualified matching contributions (QMACs)
- qualified nonelective contributions (QNECs)
The plan can specify which of these amounts are eligible for in-plan
Roth rollovers and how often these rollovers can be done.
The key here is that it is only the vested portion. That means you might not be able to rollover all the matching funds, unless you have been in the program long enough to be 100% vested in the company match.
Again the company has a choice as to what sources of funds they will allow an employee to rollover.
Now for the cost:
Participant’s tax consequences
An in-plan Roth rollover usually results in taxable income to the
participant. A typical rollover from a pre-tax account will result in
the entire amount of the rollover, including earnings, being included
in gross income. The amount includible in gross income for the year of
the rollover is:
- the amount rolled over, less
- any basis in the amount transferred.
Participants may want to increase their tax withholding amount or make
an estimated tax payment for the period in which the in-plan Roth
rollover is completed.
The additional 10% early withdrawal tax doesn’t apply to the amount of
an in-plan Roth rollover. However, the distribution may be taxable and
subject to the additional early withdrawal tax if the participant
withdraws it from the designated Roth account within five years (see
So yes your employer may allow it. It can make sense if you are early in your career, or the amount of the amount to be converted is small. You also have to have the funds for the taxes outside the 401(k).