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?

[hiredgoon37]

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.

[Opus 17 · Accepted solution]

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.

[DawnC]

 It is not relevant.  

Amount of Roth IRA Contributions That You Can Make for 2022

[Rabbit1960]

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]

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.)

[sprugg828]

To add some clarifying help here, I hope.

I found where to indicate the amount of the 1099-R entry you converted from a Traditional IRA to a Roth IRA...It is in the screens following the entry of the 1099-R information where it asks you, "What Did You Do With The Money From...?"  Click the radio button " X moved the money to another retirement account (or returned it to the same retirement account)".  Then another set of radio buttons appear.  If you did a CONVERSION, select the radio button that says, " X did a combination of rolling over, converting, or cashing out the money".  Then some boxes appear for you to enter the amount of the conversion.  Hope this helps.