Roth Conversion State Tax: 2026 State-by-State Guide

Roth conversion state taxes depend almost entirely on where you legally reside in the year you convert, not on where the money was earned or contributed. The federal government taxes every dollar of a Roth conversion as ordinary income, and your state then stacks its own income tax on top, so the state layer on an identical conversion can range from a five-figure bill in a high-rate state to zero in a state with no income tax.

Last reviewed: August 2026 | Written and reviewed by Craig Wear, CFP®, founder of Q3 Advisors

Do you have to pay state taxes on a Roth conversion?

Whether you owe state tax on a Roth conversion depends on your state of residence in the conversion year. Most income-taxing states treat the conversion as ordinary income and apply their own rate on top of the federal tax. Nine states levy no individual income tax, so residents there owe $0 at the state level, and a few income-taxing states exclude qualified retirement income entirely.

A conversion is includible in gross income for the year you receive it (Source: IRS Publication 590-A, 2025), and states that tax ordinary income generally follow that federal starting point before applying their rate and any exclusions. The controlling principle is residency. Federal law prohibits a state from taxing the retirement income of a person who is not a resident or domiciliary there, and it defines retirement income to include distributions from IRAs (Source: 4 U.S.C. Sec. 114).

A conversion is an IRA distribution for this purpose, so the state where you are domiciled on the conversion date generally holds the taxing right, and a state you left cannot reach back for it. That single rule drives every planning decision below.

Which states do not tax Roth conversions?

Nine states do not tax Roth conversions in 2026 because they levy no broad-based individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. A resident of any of the nine owes only the federal tax on a conversion, settling the state question at $0.

Two carry footnotes worth naming. Tennessee’s former Hall income tax on interest and dividends is fully repealed for tax years beginning on or after January 1, 2021, leaving no individual income tax (Source: Tennessee Department of Revenue, HIT-3). New Hampshire has never taxed earned income or IRA distributions, and its Interest and Dividends tax is fully repealed for tax years beginning in 2025 and later, so a New Hampshire conversion in 2026 faces no state income tax (Source: Kiplinger, 2026).

Washington taxes certain high-income capital gains, but a Roth conversion is ordinary income rather than a capital gain, so the conversion itself sits outside that tax. For a broader view of which states leave retirement income alone, see our companion guide on states that do not tax retirement income.

How much does a Roth conversion cost in high-tax states?

In the highest-rate states, a large Roth conversion can add a five-figure state tax bill on top of the federal tax. California carries the highest top marginal individual rate in 2026 at 13.3%, followed by Hawaii, New York, and New Jersey (Source: Tax Foundation, 2026). The table below applies each state’s top marginal rate to a $100,000 conversion for illustration.

The illustration is stark: a $100,000 conversion at California’s 13.3% top rate maps to about $13,300 of state tax, while the identical conversion by a Florida or Texas resident carries $0. Top marginal rates apply only to income above high thresholds, so a taxpayer whose conversion is not entirely in the top bracket would owe less than the flat figures above. Sizing the conversion to fill lower brackets is one reason many people study how much to convert to a Roth each year.

Larger conversions scale the exposure. Using California’s 13.3% top rate as a ceiling, the illustrative state tax rises with the conversion size, as the second table shows. The actual tax is lower to the extent the conversion fills brackets below the top rate.

Does Pennsylvania or Illinois tax a Roth conversion?

Pennsylvania and Illinois generally do not tax a Roth conversion moved directly between retirement plans, an exception that many mainstream guides omit or state incorrectly. Each state broadly excludes qualified retirement income, and a conversion completed by a trustee-to-trustee transfer or a 60-day rollover often falls inside that exclusion, so a resident may owe little or no state tax even though the full amount is federally taxable.

Pennsylvania is the clearest case. Pennsylvania Department of Revenue guidance treats monies moved from a traditional IRA to a Roth IRA by a trustee-to-trustee transfer or a 60-day rollover as generally not subject to Pennsylvania personal income tax, on the view that it is a transfer between retirement plans rather than a taxable distribution. Amounts that are not actually placed in the Roth IRA, such as funds withheld to pay taxes, are subject to Pennsylvania tax (Source: Pennsylvania Department of Revenue).

Illinois takes a similar position. The Illinois Department of Revenue does not tax a traditional IRA that has been converted to a Roth IRA, so a conversion by an Illinois resident is generally not taxed at the state level (Source: Illinois Department of Revenue). Because state treatment can vary with the facts, the current position of a taxpayer’s own state revenue department is the controlling reference.

What state retirement-income breaks apply to a conversion?

Some income-taxing states offer retirement-income exclusions, but whether one reaches a Roth conversion depends on the state’s rules and often on your age. These breaks can shrink the conversion’s state tax, yet they rarely eliminate it for a large conversion, and several exclude conversions outright.

New York allows residents who were age 59.5 or older for the full year to exclude up to $20,000 of qualified private pension and annuity income, which can offset part of a conversion for eligible taxpayers, while the state’s top rate still reaches 10.9% on amounts above the exclusion (Source: New York State Department of Taxation and Finance; Tax Foundation, 2026). Iowa fully exempts qualifying retirement income for taxpayers age 55 and older, with no dollar cap, for tax years beginning in 2023 and later, though whether that exemption reaches a conversion depends on Iowa’s rules (Source: Iowa Department of Revenue).

The lesson is that an advertised retirement-income break is not a guarantee for conversions. Verify the age threshold, the dollar cap, and whether the state counts a conversion as qualifying income before assuming relief applies.

Should you move to a no-tax state before converting?

Because the taxing right follows residency on the conversion date (Source: 4 U.S.C. Sec. 114), a bona fide change of domicile from a high-tax state to a no-tax state before you convert can remove the state layer entirely. The mechanics are demanding: the move must be genuine, and a mid-year relocation rarely produces a clean break for the conversion year. Our deep-dive on moving to a no-tax state before a Roth conversion covers the relocation path in full.

Residency for this purpose turns on several factors that high-tax states examine closely:

• Domicile is established by the location of a person’s primary home, driver’s license, voter registration, and center of life, not merely by owning property in the new state.
• High-tax states such as California and New York run residency audits and apply domicile and day-count tests to challenge a claimed relocation.
• A conversion completed after residency in the new state is established for the year falls under the new state’s rules, while one completed earlier may not.
• Part-year residents are taxed on income apportioned to the period they lived in the old state, so a conversion done close to a move can still be reached by the former state.

The direction of the move interacts with timing. A conversion completed while you are still resident in a higher-tax state is taxed by that state, whereas one completed after residency in a lower-tax state is established generally is not. Because residency mechanics are technical and heavily audited, this is an area where people often work with a qualified professional.

How do estimated taxes and withholding work in the conversion year?

A Roth conversion can trigger state estimated-tax obligations that catch filers off guard. Because no employer withholds on a conversion by default, both the IRS and most state revenue departments expect the tax to be paid through withholding or quarterly estimated payments during the year, and a shortfall can produce underpayment penalties at the state level as well as the federal.

One mechanical point matters for Pennsylvania and similar states: electing to withhold state tax directly from the converted amount can create a taxable, and possibly penalized, distribution of the withheld portion, because that money is not placed in the Roth. When the tax is instead paid from separate funds, the full converted amount remains in the Roth. Conversions made in 2018 or later cannot be recharacterized or undone (Source: IRS Publication 590-A, 2025), so a conversion is final once completed, and it must be finished by the December 31 Roth conversion deadline to count for that tax year.

When is the best year to do a large Roth conversion?

There is no single best year, but the combined bill is usually lowest in a year of lower ordinary income or during a market downturn, when the conversion fills federal brackets at a lower rate and your account value is depressed. There is no dollar limit on how much you may convert (Source: IRS Publication 590-A, 2025), which gives room to size a conversion to a target bracket, and residency can remove the state layer on top.

The 2026 federal ordinary-income brackets set the floor. For married couples filing jointly, the 22% bracket runs to $211,400 of taxable income and the 24% bracket to $403,550, with a 32% bracket beginning above that (Source: Rev. Proc. 2025-32). A conversion also raises provisional income, which can increase the taxable share of Social Security benefits under fixed thresholds of $32,000 and $44,000 for joint filers (Source: 26 U.S.C. Sec. 86); our guide to the Social Security tax torpedo explains that interaction.

A conversion is not itself subject to the 3.8% net investment income tax, though the added income can push your MAGI above the $250,000 joint threshold and expose other investment income to it. Many people also coordinate the conversion year with their required minimum distribution planning and check where a conversion pays for itself using a Roth conversion break-even analysis.

Frequently asked questions

These questions address the state-level issues that most often arise with a Roth conversion: which states tax it, how to reduce or avoid the state layer, and how residency drives the result. Each answer reflects 2026 rules and general treatment, and a taxpayer’s own facts and state of residence can change the outcome in a given year.

Do you have to pay state taxes on a Roth conversion?

It depends on your state of residence. In the nine states with no individual income tax, including Florida and Texas, a Roth conversion carries no state tax in 2026 (Source: Kiplinger, 2026). In income-taxing states the conversion is generally taxed as ordinary income at the state’s rate, though states such as Pennsylvania and Illinois broadly exclude qualified retirement income moved directly between plans.

Which states do not tax Roth conversions?

Nine states do not tax a Roth conversion in 2026 because they have no broad-based individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming (Source: Kiplinger, 2026). New Hampshire never taxed IRA distributions, and its Interest and Dividends tax is fully repealed for 2025 and later. Pennsylvania and Illinois also generally do not tax a conversion transferred directly between plans.

How do I avoid state taxes on a Roth conversion?

The state tax on a conversion is reduced or eliminated in three main ways: reside in a no-income-tax state on the conversion date, live in a state like Pennsylvania or Illinois that generally excludes the conversion, or establish genuine domicile in a low-tax state before you convert (Source: 4 U.S.C. Sec. 114). Federal tax on the full amount still applies regardless of state.

Does Illinois tax Roth IRA conversions?

Illinois generally does not tax qualified retirement plan distributions, and a Roth conversion by an Illinois resident typically falls inside that exclusion, so it is often not taxed at the state level (Source: Illinois Department of Revenue). The full amount remains taxable federally. Guides that call the conversion fully state-taxable in Illinois generally misstate the state’s treatment.

Does Pennsylvania tax Roth conversions?

Pennsylvania Department of Revenue guidance generally treats a trustee-to-trustee conversion from a traditional IRA to a Roth IRA as not subject to Pennsylvania personal income tax, viewing it as a transfer between retirement plans (Source: Pennsylvania Department of Revenue). Amounts not rolled over, such as funds withheld for taxes, can be taxable. The full conversion is still federally taxable.

Does California tax Roth conversions?

Yes. California taxes a Roth conversion as ordinary income at rates that reach a top marginal 13.3% in 2026, the highest state rate in the country (Source: Tax Foundation, 2026). On a $100,000 conversion, that illustrates up to about $13,300 of California tax on top of the federal tax, though only the portion in the top bracket is taxed at 13.3%.

Sources

IRS Publication 590-A (2025), Contributions to Individual Retirement Arrangements, https://www.irs.gov/publications/p590a
Rev. Proc. 2025-32, 2026 inflation-adjusted tax brackets, https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
IRS Notice 2025-67, 2026 retirement plan limits, https://www.irs.gov/pub/irs-drop/n-25-67.pdf
4 U.S.C. Sec. 114, limitation on state taxation of nonresident retirement income, https://www.law.cornell.edu/uscode/text/4/114
26 U.S.C. Sec. 86, taxation of Social Security benefits, https://www.law.cornell.edu/uscode/text/26/86
Tennessee Department of Revenue, HIT-3, Hall Income Tax Repealed, https://revenue.support.tn.gov/hc/en-us/articles/360057828631
Tax Foundation, State Individual Income Tax Rates and Brackets, 2026, https://taxfoundation.org/data/all/state/state-income-tax-rates-2026/
Kiplinger, States With No Income Tax / States That Don’t Tax Retirement Income (2026), https://www.kiplinger.com/taxes/states-that-dont-tax-retirement-income
Pennsylvania Department of Revenue, Taxability of Roth IRAs according to PA income tax rules, https://revenue-pa.custhelp.com/app/answers/detail/a_id/274
Illinois Department of Revenue, Does Illinois tax my pension, Social Security, or retirement income, https://tax.illinois.gov/questionsandanswers/answer.99.html
New York State Department of Taxation and Finance, Information for retired persons, https://www.tax.ny.gov/pit/file/information_for_seniors.htm
Iowa Department of Revenue, Retirement Income Tax Guidance, https://revenue.iowa.gov/taxes/tax-guidance/individual-income-tax/retirement-income-tax-guidance

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