Changing State Residency after Converting to ROTH IRA.
I currently live in Florida and contemplate moving to Virginia. If I convert my Traditional IRA to a ROTH IRA in 2021 while a resident of Florida and then move to Virginia in 2021, will Virginia tax the converted amount or will I be able to “subtract” out the converted amount from the Part Year Virginia tax return I would file for 2021 since the income would not be attributable to the period I will be a resident in Virginia in 2021 — or perhaps there would be some kind of proration rule based on the number of days I will be a resident of Virginia? Any guidance would be appreciated.
Thanks.
Permalink Submitted by Alan - IRA critic on Wed, 2020-12-30 21:03
The VA part year return includes a schedule of income earned both in and out of the state. You are not taxed on a conversion done prior to becoming a VA resident. Keep a copy of the conversion date from your IRA statement in case VA wants documentation for the conversion date to compare it with the date you applied for a VA DL or other actions taken by someone intending to become a resident.