The IRS has released guidance on “2011 Reporting for 2010 Roth Rollovers and Conversions.” See http://www.irs.gov/retirement/article/0,,id=251832,00.html. While amounts transferred into Roth accounts are subject to income tax, these conversions are not subject to the 10% penalty tax for early withdrawals from qualified retirement plans. Unless elected otherwise, taxpayers converting Roth IRAs in 2010, “must report half of the taxable amount of these 2010 rollovers and conversions on your 2011 income tax return” and the other half in 2012.

As additional resources, see:

Publication 590, Individual Retirement Arrangements (IRAs)

Retirement Plans FAQs: IRAs

Topic 413 – Rollovers from Retirement Plans

Notice 2009-75, Rollovers from Employer Plans to Roth IRAs

Notice 2010-84, Guidance on In-Plan Roth Rollovers