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Does rollover from tax-deferred 403b to Roth count toward Roth income limit?


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No.  Under Code section 408(c)(3)(B)(i), "adjusted gross income shall be determined in the same manner as under section 219(g)(3), except that any amount included in gross income under subsection (d)(3) shall not be taken into account."  Under 408(d)(3)(C), "The conversion of an individual retirement plan (other than a Roth IRA) to a Roth IRA shall be treated for purposes of this paragraph as a distribution to which this paragraph applies."  Thus, a Roth conversion is not treated as part of modified adjusted gross income for purposes of the $129K income limit for contributing to a Roth IRA.

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Thank you for the response. So I get it that it's not part of the adjusted gross income and I don't need to consider that for Roth contribution purpose.

A follow up question: If it's not part of adjusted gross income, where does the rollover/conversion amount enter the picture to be taxed, when filing for Form 1040? E.g. in Form 1040 for year 2020 (which should be similar to 2021, 2022): which line should the rollover/Roth conversion amount be entered?

 

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5 hours ago, bito'money said:

fiddle  - Lines 5a and 5b. It is part of AGI on your return. It is just excluded from modified AGI for purposes of determining your Roth contribution limit (see publication 590-A - worksheet 2.1). 

 

Thanks!

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