Roth IRA Conversion Tax Rules – Will My Roth IRA Conversion Be Penalty-Free?
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2026 · WILL MY ROTH IRA CONVERSION BE PENALTY-FREE?
No
Yes
Will you be converting a
traditional IRA?
See “Will A Distribution From
My Roth IRA Be Tax and
Penalty-Free?” flowchart.
Divide the total after-tax
account value by the total
value of all IRAs. Multiply
this percentage by the
conversion amount to find
the tax-free portion.
Determine how much of the
conversion will be taxed
when converted by following
this rule of thumb:
Are you (or your spouse)
receiving a subsidy for health
insurance or enrolled in
Medicare Part B or Part D?
You can convert 401(k)s,
403(b)s, 457(b)s and SEP IRAs.
Do you expect to take a
distribution from your Roth
IRA within five years of any
conversion?
The remaining portion will
be taxed as ordinary income
when converted.
Will the conversion be done
within two years of the first
contribution?
Are there nondeductible
contributions in the account
you are converting (or
nondeductible contributions
in any other IRA account if
converting a SEP or SIMPLE
IRA)?
You are subject to
aggregation and pro rata
rules.
Are there nondeductible
contributions in any IRA
accounts that you own
(including SEP and SIMPLE
IRAs, but excluding Roth and
Inherited IRAs)?
Are you subject to
an RMD in your IRA?
Has it been satisfied
this year?
Sorry, you must take your
RMD before the conversion.
Sorry, this conversion could
increase IRMAA surcharges
on Medicare Part B and Part
D premiums or make you
ineligible for the health
insurance subsidy.
Sorry, if you take a
distribution within five tax
years of any conversion
and are under the age of
59.5, you may be subject
to a 10% penalty.
Sorry, any conversion from
a SIMPLE IRA done within
two years of the first
contribution is subject to
ordinary income taxation
and a 25% penalty.
The conversion will be taxed
as ordinary income, but will
not be subject to the 10%
penalty. Taxes withheld from
the conversion itself are
subject to a 10% penalty
(unless an exception applies).
Will you be converting a
SIMPLE IRA?
Yes
No
No
Yes
No
Yes
No
No
No
Yes
No
Yes
No
Yes
Yes
Yes
The IRMAA surcharges are
calculated each year, based
on income reported two
years ago.
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