Is ira conversion subject to additional Medicare Tax? Since IRA conversion is treated as gross income, I would think it would.

[dmertz]

A Roth conversion is not wages or income from self-employment, so it has no effect on the additional Medicare tax calculated on Form 8959.

[NCperson]

@jerry-kim but it can be subject to the 3.8% NIIT tax, depending on your income after the conversion.  (Line 11 of Form 1040 is the trigger for most) 

[BlueRump]

Thanks.  I thought IRA withdrawals doesn't qualify for NIIT since Roth IRA conversion is viewed as a IRA withdrawal.

[NCperson · Accepted solution]

@BlueRump - agree it is not taxed @3.8%, but it can 'push' your unearned income to be taxed @3.8% 

Assume filing single with total income of $160,000 including unearned income of $10,000.  There is no NIIT 

But then I do an IRA conversion to my Roth (or a distribution - it doesn't matter) for $50,000

Now my total income is $210,000 and the $10,000 of unearned income is taxed @ 3.8%, 

My earlier point is when determining the tax impact of taking a conversion, it may have a "knock on" effect to other taxes that some fail to consider.  

[jerry-kim]

You're right.  IRA withdrawals will add to youre overall income which can effect how your NIIT is determined.