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    ill (before issuance of Form W-2 for the 2006 tax year) provide a new code to use on Form W-2 for the after-tax portion of the contributions.

    •A separate recordkeeping account must be established for each participant who wishes to make Roth 401 (

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    Roth 401 (k) Overview:

    On January 1, 2006, employees can choose to make their 401(k) contributions on either a pre-tax or an after-tax basis or a combination of the two. The contribution limits which apply to these 401(k) contributions made in 2006 (whether made pre-tax or after-tax or both) are:

    1. $15,000 under the basic limit, plus,
    2. $5,000 additionally for employees who are age 50 or older.

    •The employer remains responsible for withholding federal income tax (and state and local income tax, where applicable) and any applicable payroll taxes on the after-tax portion of each employee's 401(k) contribution.

    *While no federal (or state or local, where applicable) income tax is withheld from pre-tax contributions, payroll taxes will apply to the amounts withheld as pre-tax contributions.

    •Absent additional IRS guidance, both the pre-tax and the after-tax contributions will be reported on each employee's W-2 just as is done now. We hope that the IRS will (before issuance of Form W-2 for the 2006 tax year) provide a new code to use on Form W-2 for the after-tax portion of the contributions.

    •A separate recordkeeping account must be established for each participant who wishes to make Roth 401 (k

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    e in 2006 (whether made pre-tax or after-tax or both) are:

    1. $15,000 under the basic limit, plus,
    2. $5,000 additionally for employees who are age 50 or older.

    •The employer remains responsible for withholding federal income tax (and state and local income tax, where applicable) and any applicable payroll taxes on the after-tax portion of each employee's 401(k) contribution.

    *While no federal (or state or local, where applicable) income tax is withheld from pre-tax contributions, payroll taxes will apply to the amounts withheld as pre-tax contributions.

    •Absent additional IRS guidance, both the pre-tax and the after-tax contributions will be reported on each employee's W-2 just as is done now. We hope that the IRS will (before issuance of Form W-2 for the 2006 tax year) provide a new code to use on Form W-2 for the after-tax portion of the contributions.

    •A separate recordkeeping account must be established for each participant who wishes to make Roth 401 (

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    state and local income tax, where applicable) and any applicable payroll taxes on the after-tax portion of each employee's 401(k) contribution.

    *While no federal (or state or local, where applicable) income tax is withheld from pre-tax contributions, payroll taxes will apply to the amounts withheld as pre-tax contributions.

    •Absent additional IRS guidance, both the pre-tax and the after-tax contributions will be reported on each employee's W-2 just as is done now. We hope that the IRS will (before issuance of Form W-2 for the 2006 tax year) provide a new code to use on Form W-2 for the after-tax portion of the contributions.

    •A separate recordkeeping account must be established for each participant who wishes to make Roth 401 (

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    ions, payroll taxes will apply to the amounts withheld as pre-tax contributions.

    •Absent additional IRS guidance, both the pre-tax and the after-tax contributions will be reported on each employee's W-2 just as is done now. We hope that the IRS will (before issuance of Form W-2 for the 2006 tax year) provide a new code to use on Form W-2 for the after-tax portion of the contributions.

    •A separate recordkeeping account must be established for each participant who wishes to make Roth 401 (

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    ill (before issuance of Form W-2 for the 2006 tax year) provide a new code to use on Form W-2 for the after-tax portion of the contributions.

    •A separate recordkeeping account must be established for each participant who wishes to make Roth 401 (k) contributions.

    Rules of the Roth 401(k)

    To help with your decision, it is important to understand the rules of the Roth 401(k):

    • Roth 401(k) accounts are required to be separate accounts - the after-tax contributions cannot be combined with pre-tax contributions.

    • Distributions from the Roth 401(k) will be tax free for federal income tax purposes provided that both a 5-year holding period and a qualifying event requirement are met:

    a) The 5-year holding period begins with the first contribution to any Roth 401(k) account in the employer's plan.

    b) Qualifying events are limited strictly to attainment of age 59 1/2, death, or disability.

    Rollovers to a Roth 401(k) may be made from other employer sponsored Roth accounts. If rolled over to a Roth 401(k), the 5-year holding period begins with the earlier of the date the rolled over account was established, or the date the receiving Roth account was established.

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