re: Roth IRA early distribution: Principal subject to 10% tax before 5 years?

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Interesting

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Think about it. The whole idea of a Roth is that you fill it up with after-tax dollars. 401(K) employer contributions are not included in wage income of the employee. i.e. it's not taxed, it's in effect the same as pre-tax dollars.

Now... I have heard.... that IRS is considering a regulation that would allow employees to elect to have the value of the employer contribution included in the employee's wage income on Box 1 of W-2, and then allowed to be credited to the Roth side of a 401(K). There is precedent for this... certain disability plans that are 100 percent employer paid offer an election to have the employer-paid premiums trated as income to the employee, which then causes any disability benefits rec'd to be not subject to taxation. Who know if this will ever happen.