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premium tax credit and roth IRA conversion

Forum|Forum|1 year ago
June 9, 2024
1 reply
0 views

Hello,

I am a little confused and cannot find my answer online. My family gets an (advanced) Premium Tax Credit for Washington state marketplace medical insurance premiums. It is based on my annual income. That I understand. What I would like to know is if I were to convert a Traditional IRA to a Roth IRA, pay my 20% taxes; would the amount converted be counted as income for the year on my AGI (or whatever is used to determine my Premium Tax Credit)? Because a dispersement from a Roth does not count towards income for the Premium Tax Credit and a dispersement from a Traditional does.

Thank you in advance.

Not A Product Question

Best answer by Bsch4477

Yes, Roth conversions count as income for Affordable Care Act (ACA) subsidies, which includes premium tax credits. The amount converted from a traditional account to a Roth account is treated as income and is part of your Modified Adjusted Gross Income (MAGI).

Yes, Roth conversions count as income for Affordable Care Act (ACA) subsidies, which includes premium tax credits. The amount converted from a traditional account to a Roth account is treated as income and is part of your Modified Adjusted Gross Income (MAGI).