Why does a Roth conversion add to my AGI and thus disqualify me for the EIP?

[papa3407]

Why does a Roth conversion add to my AGI and thus disqualify me for the EIP?

[DanaB27]

A Roth conversion has to be included in your taxable income unless you has a basis in your traditional IRA (nondeductible contributions tracked on Form 8606). 

A traditional IRA is a pre-tax account and a Roth IRA is an after-tax account therefore when you move the money from the traditional to Roth this income is taxable and included in your AGI.

[papa3407]

I appreciate the effort, but that answer does not help me.

I understand that when we convert money to a Roth it's counted as income and we owe taxes on it.

But the stimulus payments are to help couples with under 150K in earned income.

The conversion is not earned income for the year and should not be used to determine eligibility for stimulus payments.

We need the IRS to understand that. 

Who can we contact to get our tax return properly adjusted?

Thank you,

Daniel 

[ReneeM7122 · Accepted solution]

You can contact the IRS taxpayer advocate service to discuss getting help to make the IRS understand that your Roth conversion is not earned income for the year and should not be used to determine eligibility for stimulus payments.

Here is a link to find your local taxpayer advocate.

@papa3407

[papa3407]

That's what I'm looking for.

I will try that.

Thank you very much!

[Gofigure21]

I have the same issue.