Roth conversions

You can use a Roth conversion to convert retirement assets from a traditional IRA to a Roth IRA. It’s a way to get the benefits of a Roth IRA even if your income is too high. For details about income limits for IRAs, check out the IRA Contribution limits on the IRS website.

We currently support cash-only Roth conversions. For now, you can contact Robinhood Support if you’d like to start a Roth conversion.

Before you begin

You’ll likely be required to pay taxes on the converted amount for the tax year in which you complete the conversion. You must complete a Roth conversion by December 31 for the designated tax year. We’re building a way to instantly convert funds in the app, but for now the process can take 3-5 business days (plus observed holidays) to complete.

Generally, the converted amount is taxed as ordinary income, as shown on the 1099-R that you’ll get from Robinhood. You’ll also get a Form 5498 detailing the amount converted to the Roth IRA. You’ll need to have both a traditional IRA and Roth IRA opened with Robinhood and funds available to withdraw in your traditional IRA before starting a Roth conversion.

You may need to liquidate securities into withdrawable cash in your traditional IRA if you want to convert those funds, or need extra cash available for tax withholding.

It’s important to understand that Roth conversions are irrevocable, which means you can't undo the conversion afterwards. Make sure you're eligible to convert a traditional IRA to a Roth IRA before submitting your request. Robinhood is required by law to report a Roth conversion from your traditional IRA to your Roth IRA to the Internal Revenue Service (IRS) and state tax authorities.

Keep in mind

If you have a required minimum distribution (RMD), you must satisfy your RMD before you can complete a Roth conversion. We recommend consulting a qualified tax professional to determine if a Roth conversion is right for you.

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Disclosures

Funds being contributed into or distributed from retirement accounts may entail tax consequences. Contributions are limited and withdrawals before age 59 1/2 may be subject to a penalty tax. Contents provided are for informational purposes only and do not constitute tax or investment advice. For specific questions, we recommend consulting a tax professional. A Robinhood IRA account requires first opening a Robinhood brokerage account.

All investments involve risk and loss of principal is possible. Investors should consider their investment objectives and risks carefully before investing.

Securities trading is offered through Robinhood Financial LLC, a registered broker-dealer and Member SIPC, and a subsidiary of Robinhood Markets, Inc. (Robinhood).

Reference No. 2642780
Still have questions? Contact Robinhood Support