Wisconsin

My understanding is that if you live in Wisconsin and you earn over $100,000 you cannot convert from a traditional to a Roth IRA without penalty in 2010. Is this true and are there any other states that have not signed on to the 2010 conversion rules from traditional to Roth IRA?



There could be other states, but I do not have an effective way to determine how many. This is a matter of how the various states conform to federal tax law, either automatically or by required legislative action. For example, I understand that CA does NOT conform automatically, but makes an exception for retirement plan provisions, so Roth conversions there would not be a problem.

As for WI, the attached article addresses the problem. This is a no brainer for cash starved states, which describes about 45 of the states. My prediction is that the WI legislature will be placed under huge public pressure to conform on these conversions, and since this is one of the few issues where public pressure will raise revenue for the state, the legislature will pass the required provision allowing WI residents to convert in 2010. While they will probably be allowed to convert, that does not automatically mean that they will also be allowed to defer the income to 2011 and 2012. WI may want it to all be reported in 2010. Will have to wait and see:

http://www.jsonline.com/business/78615397.html



Thank you!



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