No, you do not have to pay taxes immediately on a Roth conversion. The converted amount is taxed as ordinary income for the calendar year the conversion settles, and the tax is formally due when you file that year’s return, typically April 15 of the following year. What trips people up is the gap in between: the federal tax system runs on pay-as-you-go rules, so a large conversion usually requires an estimated payment or extra paycheck withholding well before the filing deadline, or you’ll owe an underpayment penalty on top of the tax itself.
When the Tax Is Actually Due
Your custodian will report the conversion on Form 1099-R, and the income lands on the federal return for the year the transaction settles. Convert in October 2026 and you report it on your 2026 return, due April 15, 2027.
That April date is the outer limit, not permission to wait. The IRS expects tax to be remitted throughout the year as income is earned. If withholding and estimated payments don’t keep pace, the underpayment penalty runs at the federal short-term rate plus 3 percentage points, which was 7% as of early 2026.1Internal Revenue Service. Quarterly Interest Rates
Estimated payments fall in four installments: April 15, June 15, and September 15 of the current year, and January 15 of the following year.2Internal Revenue Service. Form 1040-ES – Estimated Tax for Individuals (2026) A conversion late in the year still needs to be covered by the January 15 installment or by increased withholding on other income before year-end.
Safe Harbors That Keep You Penalty-Free
You avoid the underpayment penalty by meeting any one of these thresholds through withholding and estimated payments combined:
- 90% of the tax shown on your return for the conversion year.
- 100% of last year’s total tax liability, or 110% if your prior-year adjusted gross income exceeded $150,000 ($75,000 if married filing separately).
- A balance due at filing time of less than $1,000.
The IRS applies whichever threshold produces the lower required payment.3Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty For most people running a conversion, the prior-year safe harbor is the easier target. Your prior-year tax was calculated without the conversion income, so paying 100% or 110% of that figure is usually manageable, and any additional tax on the conversion itself can wait until April without penalty.
The W-4 Withholding Shortcut
If you converted late in the year and blew past the quarterly deadlines, extra paycheck withholding is the strongest fix. The IRS treats wage withholding as if it were paid evenly across the year, even when the additional withholding happened entirely in November and December.4Office of the Law Revision Counsel. 26 U.S. Code 6654 – Failure by Individual to Pay Estimated Income Tax File a new W-4 with your employer requesting additional federal withholding, and those dollars are treated as though they came in each quarter.
Estimated payments don’t get that treatment. A large estimated payment in December is credited only to the fourth quarter and won’t retroactively cover the April, June, or September installments.
The Annualized Income Installment Method
If it’s too late to adjust withholding and you converted in the second half of the year, Schedule AI of Form 2210 lets you recalculate the required installment for each quarter based on the income actually earned during that period. Because the conversion income only appears in the quarter it happened, the required payments for earlier quarters drop.5Internal Revenue Service. Instructions for Form 2210 – Underpayment of Estimated Tax by Individuals, Estates, and Trusts The full conversion tax shifts to the final installment. It doesn’t reduce the underlying tax, but it can wipe out the penalty.
Pay the Tax From Outside the Retirement Account
When you actually pay the tax, use money from a savings account, a taxable brokerage account, or other liquid funds rather than the conversion itself. Keeping the entire converted balance inside the Roth is the whole reason to convert in the first place.
You can ask your custodian to withhold part of the conversion for taxes, but if you’re under age 59½, the IRS treats the withheld portion as a distribution that never reached the Roth and hits it with the 10% early withdrawal penalty on top of income tax.6Internal Revenue Service. Topic No. 557, Additional Tax on Early Distributions From Traditional and Roth IRAs On a $100,000 conversion with $25,000 withheld, that’s an extra $2,500 you’ll never see again.
Even over 59½, withholding from the conversion still shrinks the amount that ends up compounding tax-free. Unless you truly have no outside cash, don’t pay the conversion tax with conversion dollars.
Bills the Conversion Income Can Trigger Beyond Income Tax
The conversion doesn’t only push you into a higher federal bracket. Because it inflates adjusted gross income, it can trigger several other costs that surprise people who budgeted only for the income tax.
Medicare Premium Surcharges
Medicare sets premiums based on modified AGI from two years earlier. A 2026 conversion affects 2028 premiums.7Medicare.gov. 2026 Medicare Costs For 2026, Part B surcharges begin at $109,000 of modified AGI for individual filers and $218,000 for joint filers, and can add up to $487 per month.8CMS. 2026 Medicare Parts A and B Premiums and Deductibles Spreading a conversion over multiple years can keep income below a surcharge tier.
Social Security Benefit Taxation
Conversion income counts toward the combined income figure that determines how much of your Social Security is taxable. Up to 85% of benefits become taxable once combined income exceeds $34,000 for single filers or $44,000 for joint filers, thresholds that have never been indexed for inflation.9Internal Revenue Service. IRS Reminds Taxpayers Their Social Security Benefits May Be Taxable A $50,000 conversion for a retiree previously below the threshold could make an additional $42,500 of benefits taxable.
Net Investment Income Tax
The 3.8% net investment income tax applies to the lesser of net investment income or the amount modified AGI exceeds $200,000 (single) or $250,000 (joint).10Internal Revenue Service. Topic No. 559, Net Investment Income Tax The conversion itself isn’t investment income, but the higher AGI can pull existing capital gains, dividends, or rental income above the threshold and expose them to the additional 3.8%.
Child Tax Credit Phase-Outs
The Child Tax Credit begins phasing out at $200,000 of income for most filers and $400,000 for married couples filing jointly.11Internal Revenue Service. Child Tax Credit A conversion that pushes you past those thresholds reduces the credit at the phase-out rate.
State Income Tax
Most states with an income tax treat a conversion the same way the IRS does. Rates run from zero in no-tax states up to 13.3% at the top end. Your state tax effectively stacks on top of the federal rate, and forgetting to budget for it is one of the more common mistakes.
The Decision Is Permanent
One boundary worth knowing before you convert: you can’t undo it later. Recharacterization of Roth conversions ended for tax years after December 31, 2017.12Office of the Law Revision Counsel. 26 U.S. Code 408A – Roth IRAs Once the conversion settles, the income and the tax bill are locked in. Recharacterization still exists for regular Roth contributions that turn out to exceed the income limit, but not for conversions. Run the full projection first, including the bills described above, because there is no walking it back.