Required minimum distributions cannot be converted to a Roth IRA. The specific dollars you’re required to withdraw each year are ineligible for rollover under federal regulations, so they can never enter a Roth. Once you’ve taken your full RMD for the calendar year, though, you can convert any additional amount from your traditional IRA to a Roth with no dollar cap and no income limit.
Why the RMD Itself Is Off-Limits
The prohibition comes from 26 CFR ยง 1.408A-4, which requires that a distribution be eligible for rollover before it can qualify as a conversion. Because the tax code separately bars rolling over required minimum distributions, the RMD amount is automatically excluded from anything that can move into a Roth IRA.1eCFR. 26 CFR 1.408A-4 – Converting Amounts to Roth IRAs The regulation states plainly that an individual may not convert IRA assets to a Roth “to the extent that the required minimum distribution for the traditional IRA for the year has not been distributed.”
Attempting to route the RMD into a Roth anyway creates two separate tax problems. First, the IRS doesn’t treat the deposit as a conversion at all; it becomes a regular Roth contribution, and because RMD amounts typically exceed the annual Roth contribution limit, the excess triggers a 6% excise tax each year it remains in the account.2Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Individual Retirement Accounts Second, because the RMD was never actually taken, the IRS treats it as missed and imposes a 25% excise tax on the shortfall, reduced to 10% if you correct it within roughly two years.3Office of the Law Revision Counsel. 26 USC 4974 – Excise Tax on Certain Accumulations in Qualified Retirement Plans Both penalties can hit at once.
The First-Dollar Rule Prevents Workarounds
You can’t sequence your way around the restriction. In any year you owe an RMD, the first money withdrawn from your traditional IRA counts as the required distribution until the full RMD has been satisfied.4Internal Revenue Service. Publication 590-B – Distributions From Individual Retirement Arrangements Pulling money out in January and labeling it a Roth conversion doesn’t work: the IRS reclassifies those early dollars as RMD regardless of the paperwork.
Even if you tell your custodian to process a conversion first, the regulation overrides that instruction and treats the initial withdrawal as satisfying the RMD.1eCFR. 26 CFR 1.408A-4 – Converting Amounts to Roth IRAs The clean approach is to take your full RMD as a separate distribution first, confirm it has been paid out, and then submit the conversion request.
What You Can Convert After the RMD
Once the RMD is fully distributed, every remaining dollar in your traditional IRA is eligible for conversion. There is no cap on the conversion amount, and there is no income limit that disqualifies you.5Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs Income restrictions on Roth conversions were removed for tax years after 2009.
The reason people bother: Roth IRAs are not subject to required minimum distributions during the original owner’s lifetime.6Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs) Moving traditional IRA money into a Roth means those funds stop generating forced taxable withdrawals in later years, which matters if you don’t need the income or plan to leave the account to heirs.
How the Conversion Is Taxed
The converted amount is added to your ordinary income for the year of the conversion. Convert $50,000 and your taxable income rises by $50,000, taxed at your marginal rate. There is no capital gains treatment and no conversion discount. Converting too much in one year can push you into a higher bracket and undermine the long-term benefit.
If every dollar in your traditional IRAs is pre-tax, the entire conversion is taxable. If you’ve ever made nondeductible contributions, the pro-rata rule applies: you cannot select just the after-tax dollars to convert. Each converted dollar is treated as a proportional mix of taxable and nontaxable funds based on the combined balance of all your traditional, SEP, and SIMPLE IRAs. If 10% of that combined balance came from nondeductible contributions, then 10% of any conversion is tax-free and 90% is taxable.
You report the conversion and track your after-tax basis on Form 8606.7Internal Revenue Service. About Form 8606, Nondeductible IRAs Filing it correctly is what prevents you from paying tax twice on money you already contributed after-tax. If you’ve made nondeductible contributions over the years without filing Form 8606, reconstructing that history before you convert can save real money.
Medicare Premiums Can Rise Two Years Later
A Roth conversion can raise your Medicare premiums two years down the road. Medicare Part B and Part D premiums include an Income-Related Monthly Adjustment Amount (IRMAA) for higher earners, and Social Security sets your IRMAA bracket using your tax return from two years prior. A conversion done in 2026 shows up on your 2026 return, which Medicare uses to set your 2028 premiums.
For 2026, the standard monthly Part B premium is $202.90 for individuals with modified adjusted gross income at or below $109,000 ($218,000 for joint filers). Crossing the first threshold raises the total to $284.10 per month, and the top bracket reaches $689.90 per month for individuals at $500,000 or more ($750,000 joint).8Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles The same brackets drive the Part D surcharge, so the combined hit can be meaningful. Splitting a large conversion across multiple years is a common way to stay below the next IRMAA cliff.
Conversions Cannot Be Undone
Before 2018 you could reverse a Roth conversion through recharacterization. That option no longer exists. The Tax Cuts and Jobs Act permanently eliminated recharacterization of Roth conversions, so once the money moves into the Roth, it stays there.9Internal Revenue Service. Retirement Plans FAQs Regarding IRAs If the market drops the month after you convert, you’ve already paid tax on the higher pre-drop value with no way to unwind the transaction. That makes the size and timing of each conversion a one-way decision.
Inherited IRAs Are Different
If you inherited a traditional IRA, your options depend on your relationship to the original owner. A surviving spouse who rolls the account into their own IRA can convert some or all of it to a Roth under the same RMD-first rules described above. Non-spouse beneficiaries cannot convert an inherited traditional IRA to a Roth at all. Distributions from an inherited account remain taxable and cannot be rerouted into a Roth, even during the 10-year payout window that applies to most non-spouse beneficiaries who inherited after 2019.
Deadlines, Withholding, and Reporting
A Roth conversion has to be completed by December 31 of the tax year to count for that year. Unlike regular IRA contributions, there is no extension to the following April. If December 31 falls on a weekend, most custodians want the request in hand by 4 p.m. Eastern on the last business day. Because the RMD has to be fully distributed before the conversion, pushing both transactions into late December leaves little room for error.
Your custodian issues Form 1099-R for the distributions, covering both the RMD and the conversion, with separate distribution codes indicating which is which.10Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. You file Form 8606 with your return to report the conversion and calculate the taxable portion if you have any after-tax basis.7Internal Revenue Service. About Form 8606, Nondeductible IRAs
Default federal withholding on an RMD is 10% unless you elect a different rate or opt out.11Internal Revenue Service. Pensions and Annuity Withholding On the conversion itself, paying the resulting tax bill from a separate taxable account is generally better than withholding from the converted amount. Every dollar withheld for taxes is a dollar that never reaches the Roth and never grows tax-free.