Proposal to Limit the Conversion of a Non-Deductible IRA to a Roth IRA

Each year the Department of the Treasury issues General Explanations of the Administration’s Fiscal Year Revenue Proposal. The Fiscal Revenue Proposal for 2017 was released in February of 2016.

The proposal would permit only those pre-tax dollars in a non-deductible IRA account to be converted to a Roth IRA. Thus, after-tax amounts held in a traditional IRA could not be converted to a Roth IRA. The Proposal would apply to conversions occurring after December 31, 2016.