We converted almost $48K to Roth in our IRA in February 2020. (Admittedly, the timing was not ideal--just a month or so before the pandemic hit the market--but it is paying off in the long run.)
My main question right now, before we file our 2020 taxes (married, filing jointly), is how this amount converted to Roth is treated by the federal government in the context of the recent $1,400 stimulus payment. Is this counted as part of regular AGI? If so, that means we get $0 (over $160K AGI), rather than $7,000 (under $150K AGI) from the stimulus payments for our family of 2 adults & 3 kids. Is there anything that can be done to still qualify for the current stimulus payments?
Yes, taxable Roth conversions will add to your AGI. There is nothing that you can do to change that after the fact.
File with status MFS.
Have the spouse who did not do the conversion claim the dependents.
MFS has many limitations and you might loose most of the tax advantage of having 3 children and end up with more tax
if you qualified for EIP1 and EIP2, you qualify for EIP3 also.
Don't file until you get it.
You should have gotten it already. most of EIP3 has been direct deposited on 3/17.