ROTH IRA Roller over

dj307 · ‎March 9, 2022

I receive a monthly pension payment from the state. The state does not allow for a lump sum distributions. The payment I received is taxed when it is distributed. The state will make payment into what ever account I choose. The question is if I can have this after tax distribution rolled over to my ROTH IRA?

DianeW777 · ‎March 9, 2022

Yes, if you have earned income from work. If you have earned income then you must use the following guidelines to put money into a Roth IRA.

For 2022, 2021, 2020 and 2019, the total contributions you make each year to all of your Roth IRAs can't be more than:

$6,000 ($7,000 if you're age 50 or older), or
If less, your taxable compensation for the year

The IRS link has a nice chart you can review and, if limited the amount you can contribute is calculated as follows (TurboTax calculates this automatically based on your income):

Amount of Roth IRA Contributions You Can Make For 2021

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dmertz · ‎March 9, 2022

If this is pension that is in the form of an annuity that pays for a period of 10 year or more or for life, which seems likely, these monthly payments are not eligible for rollover. However, as DianeW777 said, you can use this or any other cash to fund a new regular Roth IRA contribution that you are eligible to make. It's just cash.