A 401(k) is not an IRA
The pro-rata rule aggregates IRAs. A 401(k), 403(b) or 457(b) is a workplace plan, not an IRA, so pre-tax money held in one does not enter the calculation at all. This is not a loophole or an oversight: section 408(d)(2) is about individual retirement arrangements, and a plan is a different thing in the statute.
The practical consequence is the one that matters. Money left in a former employer’s plan, or moved from an IRA into a current employer’s plan, stops counting. The same conversion that was almost entirely taxable becomes tax-free, and nothing else about it changes.
What it depends on
Whether a plan accepts money rolled in from an IRA is the plan’s decision, not yours and not the law’s. Many do and some do not, and the ones that do often accept pre-tax balances only. The plan document is the answer, and the administrator will confirm it in writing if asked.
There is a second condition that is easy to miss: only pre-tax money can usually go in. If your IRA holds a mix, the after-tax basis normally has to stay behind, which is the outcome you want anyway, because the basis is what makes the conversion tax-free.
The deadline is the end of the year, not the conversion
Form 8606 measures the IRA balance on 31 December. A rollover into a plan completed in December still removes that balance from the calculation for the whole year, even if the conversion happened in February. A rollover completed in January does not help the year before, however early in January it lands.
That makes this one of the few tax decisions with a hard, checkable date rather than a judgement. Our pro-rata rule calculator shows both figures side by side: what the conversion costs with the balance in an IRA, and what it costs with the same balance in a plan.
What this does not solve
Moving money into a plan is not free of consequences. Plan investment menus are narrower than an IRA’s, fees differ in both directions, and creditor protection and withdrawal rules are not the same. Those are real trade-offs and they are not tax questions. The pro-rata cost is one input to the decision rather than the whole of it.