Is a Roth conversion taxable by state?

The short answer: usually yes

A Roth conversion is not a special transaction with its own tax code. It is an ordinary distribution from a traditional IRA or 401(k) that lands in a Roth account instead of your checking account, and it is taxed accordingly.

That mechanism decides the state answer. Forty-one states and DC levy an income tax, and nearly all start from your federal AGI or taxable income. The converted amount already sits in that number, so it flows onto your state return unless the state takes it back out. Most don't, or only up to a limit.

Three variables set what you owe: whether your state taxes income at all, whether it exempts retirement plan distributions and up to what amount at what age, and your marginal rate on the converted dollars. A Roth conversion strategy priced off the federal 12% bracket alone is missing part of the bill.

One thing state law does not change: the growth. Once converted, the Roth balance compounds tax-free and comes out tax-free in every state, and it is exempt from required minimum distributions during your lifetime. State tax is a one-time toll at the moment of conversion, not a recurring drag.

The 9 states that can't tax it

Nine states levy no personal income tax on wages or retirement income, so a conversion of any size costs exactly nothing at the state level. New Hampshire joined this group after phasing out its tax on interest and dividends, which never applied to retirement distributions anyway.

Washington's capital gains tax is worth a footnote for high earners, but it applies to long-term gains on the sale of assets, not to distributions from retirement accounts. A conversion does not trigger it.

4 states that exempt it outright

These states do levy an income tax, but they subtract qualified retirement plan distributions from it without a dollar cap. For a conversion of any size, the practical result is the same as living in a no-tax state.

Illinois taxes income at a flat 4.95% but subtracts qualified retirement income, IRA and 401(k) distributions included, at any age. Mississippi exempts qualified plan distributions at its 4.40% flat rate, though early distributions can be taxable. Pennsylvania does not tax retirement plan distributions once you reach retirement age, making a conversion after 59½ generally not a taxable event there.

Iowa joined this group in 2023, exempting retirement income entirely for residents age 55 and older. The age gate is the whole story in Iowa: convert at 54 and the full amount is taxable at 3.80%; convert at 55 and it is free. If you are close to the line, waiting a year is worth more than any bracket-filling refinement.

22 states with a retirement exclusion

This is the group where the answer is genuinely "it depends." Each of these states subtracts retirement plan distributions up to a dollar cap, often gated behind a minimum age. A conversion is a distribution, so it competes for that same allowance with every ordinary withdrawal you take in the same year.

The cap is shared across the year, not granted per transaction. If you are already withdrawing from a traditional IRA for living expenses, those dollars draw on the same allowance, so the headroom left to shelter a conversion is the cap minus what you have already taken. Where the cap is large and you have cleared the age gate, a moderate conversion can land entirely inside it at zero state cost, which is exactly what happens to Georgia in the cost table below.

Each row runs A to Z down the left column and continues down the right, and shows the exclusion for a single filer then for a married couple. The married figure assumes both spouses qualify, since most of these exclusions are per person. Four states step up from a smaller exclusion at a younger age: Colorado $20,000 from 55, Georgia $35,000 from 62, Maryland $18,100 from 62, South Carolina $3,000 below 65.

Figures are tax year 2025; verify with your state's revenue department. For each state's marginal rate and its treatment of Social Security and pensions alongside these numbers, see the state tax comparison hub.

16 states that tax every dollar

These states offer no general exclusion for IRA or 401(k) distributions, so every converted dollar is taxed at your ordinary marginal rate. Several of them exempt Social Security or public pensions, which does nothing for a conversion out of a private tax-deferred account.

The list: Arizona, California, Connecticut, Hawaii, Idaho, Kansas, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Oregon, and Utah.

Three deserve an asterisk. North Dakota taxes the first $48,475 of taxable income at 0% for a single filer and $80,975 for a couple, so a modest conversion there can still cost nothing. Utah uses a retirement tax credit that phases out with income rather than a deduction. Michigan is mid-transition, phasing its retirement exemption up toward full exclusion, which will move it out of this group.

California and Oregon are the two that most often change a decision. Both tax conversions in full at rates reaching into the high single digits well before you are wealthy by local standards, which is why a conversion that is obviously correct in Texas can be a close call in California.

What a $100,000 conversion costs

Category labels only get you so far. To put a number on it, we ran the same conversion through our engine for a married couple, both age 65, with $30,000 of Social Security and $30,000 of traditional IRA withdrawals already on the return, then added a $100,000 conversion on top.

The column below is the marginal state cost: state tax with the conversion minus state tax without it. Federal tax on the conversion is identical in every row and is not included.

Georgia is the instructive row. It taxes income at 5.39% and sits in the exclusion group, yet the conversion costs nothing: a couple over 65 has a $130,000 combined exclusion, and the conversion fits inside it with room to spare. A large age-gated exclusion beats a low rate with no exclusion at all.

New Jersey is the row that shows the cliff at work. The conversion lifts New Jersey gross income to $130,000, which drops the couple from a full $100,000 exclusion into the 25% tier. Their Social Security stays out of that test, which is the only reason they land in the 25% tier rather than losing the exclusion outright. Convert $20,001 more and they cross $150,000, the exclusion vanishes, and the marginal cost of those last dollars is far above New Jersey's headline rate.

These are illustrative projections from our engine, not tax advice, and they move with your other income, filing status, and age. Rates and exclusions come from state revenue departments for tax year 2025; the methodology page lists the sources and known simplifications.

States that already taxed your contributions

A handful of states did not follow the federal rules on the way in, which means part of what you convert has already been taxed once at the state level and should not be taxed again.

New Jersey and Massachusetts never allowed a deduction for traditional IRA contributions, so those went in with state-after-tax dollars. When you convert, only the earnings portion is taxable to the state, recovered proportionally rather than all at once. Pennsylvania goes further and taxes 401(k) elective deferrals in the year you make them, which is the deeper reason a Pennsylvania conversion after retirement age produces no state tax.

Tracking this basis is on you. The 1099-R reports one federal taxable amount and knows nothing about your state's history, so proving that a slice of the conversion is already-taxed money falls to your own records. Decades of contributions in one of these states with no running total is worth reconstructing before you convert a large balance.

Moving before you convert

State income tax on a conversion is owed to the state you are a resident of in the year the conversion happens. There is no lookback and no exit tax on retirement income.

That is not custom, it is federal law. Title 4, Section 114 of the U.S. Code, enacted in 1996, bars a state from taxing the retirement income of a former resident. Before it passed, several states pursued departed retirees for tax on pensions earned while they lived there. Today someone who leaves California in March and converts in November owes the tax to their new state, and California cannot reach it.

The constraints are about residency, not the conversion. High-tax states scrutinize departures using tests that look at where you actually live: days present, home and vehicles, voter and license registration, doctors and advisers. A conversion completed while you are still a resident is taxable to the old state no matter where you finish December. If a relocation is already planned, timing conversions to land after the move is one of the largest levers in retirement tax planning.

The reverse holds too. Moving from Florida to a high-tax state to be near family makes the conversion window you have been putting off more expensive, which argues for converting before the move rather than after.

Model your combined rate

The decision is not whether your state taxes conversions. It is whether your combined federal and state rate today is lower than the combined rate you expect when RMDs, Social Security, and a possible survivor's single filing status all arrive at once.

That comparison needs a year-by-year projection, because the inputs move. Your state exclusion may unlock at 65 or 67. Social Security taxability changes as other income rises. IRMAA surcharges run on a two-year lookback, so a conversion at 63 shows up in your Medicare premium at 65. And a surviving spouse filing single faces narrower brackets on much the same income, often the strongest argument for converting early.

The calculator models federal tax, RMDs, Social Security taxability, and IRMAA for free. Add your state and it layers the state calculation on top, year by year, so you see the full cost of a conversion rather than the federal slice. State tax modeling is a Pro feature; the projection itself is not.