Teachable
New Member

Retirement tax questions

NOTE: I'm not an expert, so treat this with appropriate skepticism and consult with appropriate authoritative sources.

 

I think it depends on when you do the conversion(s). For example, at some point -- let's say at the start of the year -- you reported your projected income for the year, and that projection established your financial assistance and premium payments for your selected plan. Let's suppose that at that point, you had not decided to do a Roth conversion (although you might have been considering it), so you would not include it in your projected income. Then, on December 15th, you decide to proceed with a conversion and actually do it, and you faithfully report the change to your income for that year to Covered CA. Let's also suppose you paid your December premium on 12/1. They don't do anything retroactively with the change to your income, so the conversion would not affect any of your premiums for that year. The following year, you're back in the same boat. The conversion(s) you just did were income for the prior year, and have no bearing on the upcoming year.

 

If someone has definitive information to the contrary, please post. Thanks!

 

Note: The distribution from your IRA (to roll into the Roth IRA) definitely go into your AGI (with some possible specific exceptions) and will very likely affect your taxes. The response above is only about Covered CA.