Stimulus eligibility - In-Plan Roth Rollover counted as income?

Forum|Forum|6 years ago
March 30, 2020
1 reply
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I retired in Dec 2018 so 2018 had good income. All of 2019 I worked on Honey-Dos and had only a small amount of income from an IRA withdrawal. However, I also rolled over a chunk of IRA to Roth to pay taxes on it while they're low.

The Roth rollover money still isn't touchable for several years but it "appears" within AGI sooooo does this count against my stimulus eligibility? Can anyone point me to reliable source of info that addresses this question? From what I can tell, the present Stim plan leaves a gaping hole where new (2019) retirees fall in.

tocguyAuthor

I've fwd'd this question to my State Senator for assistance. I will share pertinent details of their response here when they become available.

DanaB27

Yes, the conversion from traditional IRA to Roth IRA is taxable income and included in your adjusted gross income (AGI).

If you have an AGI of up to $75,000 ($150,000 married filing jointly), you should be eligible for the full amount of the recovery rebate. As your AGI increases, the stimulus amount you get will go down. The stimulus check rebate completely phases out at $99,000 for single taxpayers, $146,500 for those filing as Head of Household and $198,000 for joint filers with no kids.

The stimulus check will be paid this year based on information from your most recent tax return and will be reconciled in tax year 2020 to ensure you received the correct rebate amount.

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tocguyAuthor

Thank you for responding.

Yes, it is understood that the Roth Rollover is part of AGI. I state so in my question.

Your response describes the underlying reasons FOR my posting the question. I do not understand how it addresses the issue that my question describes, i.e., that stimulus eligibility presently relies on either 2018 tax return OR 2019 tax return. The issue that I am trying to raise is that anyone who had income in 2018 that may exclude them from stimulus eligibility but has not yet filed the (now delayed until July) 2019 tax return but had little actual 2019 income would be skipped over from receiving a stimulus check. This is in conflict with the intent of the stimulus which is to put disposable income into the hands of consumers.