Does a Roth IRA conversion count towards income limits for Roth IRA contributions? Can I contribute to Roth IRA if the conversion results in income being more than $144K?

Forum|Forum|4 years ago
January 24, 2022
2 replies
19 views

I would like to convert from a traditional IRA to a roth IRA and contribute to the roth IRA in 2022. If my income is less than the roth IRA income contribution limits, but the conversion adds to that and puts me over (>$144K) does that mean I can't contribute to the roth IRA or is the additional taxable income from the conversion not relevant for a roth IRA contribution.

TurboTax Deluxe Online

Best answer by Opus 17

The income that you realize from converting a traditional IRA to a Roth IRA is not included in your modified AGI when determining your eligibility to make Roth IRA contributions.

Opus 17

Answer

Level 15

The income that you realize from converting a traditional IRA to a Roth IRA is not included in your modified AGI when determining your eligibility to make Roth IRA contributions.

Rabbit1960

Level 2

I've read this from several sources, that converting to Roth should not count against MAGI for making a RothIRA contribution. My problem is that TurboTax says it does count. No matter how I enter a simulated 1099-R it adds the rollover amount to MAGI and declares my RothIRA to be excess contributions. If there is some magic combination of codes for Box 7 of the 1099-R to make this work, I can't find it.

dmertz

Level 15

TurboTax handles this if entered correctly. You must enter the simulated Form 1099-R, indicate that you moved the money to another retirement account, indicate that you did a combination of cashing out, rolling over, and converting, then indicate the amount converted (presumably the entire amount). TurboTax will exclude the converted amount from line 1 of TurboTax's Roth IRA Contribution Limit Worksheet.

Note that any amount of an In-plan Roth Rollover within an employer plan like a 401(k) is not permitted to be excluded. (A designated Roth account in a qualified retirement plan like a 401(k) is not a Roth IRA.)