Roth Conversion – Which State to Pay Tax?
Individual is a MN resident 1/1/25 – 5/31/25 but will be a NY resident from 6/1/25 – 12/31/25. He will (of course) have to file federal, MN and NY taxes next year. He wants to do a Roth conversion this week but is wondering if he will have to pay taxes on it in one state (just MN?) or both states. In other words, his income at the federal level won’t change but how to report it at state level???
Please advise. And thank you in advance for your help.
Permalink Submitted by Alan - IRA critic on Tue, 2025-05-20 14:21
Part year tax forms must be filed in each state reporting the income according to the date realized. Therefore, a current conversion would only be taxable on the MN form. That said, if there are any elements of domicile in NYS prior to 6/1, NYS may want to tax the conversion and that would lead to a hassle over which state is entitled to collect tax on the conversion.