Submitted By: someone
Answered: January 20, 2020 9:26 pm

If I convert my traditional IRA to a Roth IRA, does this create earned income?

No. The conversion triggers taxable income (the full amount of what’s in the traditional IRA if no nondeductible contributions were ever made). But the mere fact that the original contributions were based on earned income does not make the conversion income into earned income.

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Tax Glossary

Nonperiodic distributions

A 20% withholding rule applies to nonperiodic distributions, such as lump-sum distributions, paid directly to employees from an employer plan.

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