Which States Tax Roth Conversions in 2026? (Full List)

When you convert a traditional IRA or 401(k) to a Roth, the converted amount is ordinary income on your federal return. But whether your state also taxes that conversion depends entirely on where you live — and the difference can be thousands of dollars on a single conversion.

This is the short version: nine states have no income tax at all, so they never tax a Roth conversion. Illinois has an income tax but specifically exempts retirement income — including Roth conversions. Every other state taxes the conversion as ordinary income at its regular rates.

Below is the full breakdown for 2026, plus the three cases that trip people up.

States That Don't Tax Roth Conversions At All

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These nine states levy no tax on wage or retirement income, so a Roth conversion costs you $0 in state tax:

• Alaska
• Florida
• Nevada
• New Hampshire (the legacy interest-and-dividends tax fully phases out by 2027; it never applied to conversions)
• South Dakota
• Tennessee
• Texas
• Washington (a 7% tax applies to large capital gains only — not to Roth conversions)
• Wyoming

If you're planning a large multi-year conversion ladder, relocating to one of these states first is the single biggest state-tax lever available.

The Illinois Exception

Illinois has a flat 4.95% income tax — but it does not tax most retirement income, and that includes the taxable portion of a Roth conversion. The federally taxable conversion amount flows onto Form IL-1040 and is then subtracted on Line 5 as exempt retirement income.

The practical result: a retiree in Illinois converting $100,000 pays the same state tax on that conversion as a retiree in Florida — zero — even though Illinois is not a "no income tax" state. Iowa (for those 55+) and several states with generous retirement-income exclusions soften the blow similarly, but Illinois is the cleanest full exemption.

Every Other State Taxes the Conversion as Ordinary Income

In the remaining states, your Roth conversion stacks on top of your other income and is taxed at your marginal rate. A few examples for a $30,000 conversion:

• California (up to 13.3% top rate): a high-income conversion year can cost well over $3,000 in state tax alone.
• Georgia (5.39% flat): about $1,617 in state tax on a $30,000 conversion.
• New York, New Jersey, Oregon, Minnesota, Hawaii: all have top rates above 9% and tax conversions fully.

Want the exact number for your state, including its retirement-income rules and a 30-year Monte Carlo tax projection? Each state has a dedicated page — for example Georgia, California, Illinois, New York, Texas, and Florida. All 51 jurisdictions are covered.

The Hidden Cost: The ACA Cliff Stacks on Top

Here's what most state-tax comparisons miss. If you're an early retiree on an ACA marketplace plan, the conversion doesn't just trigger state and federal income tax — it raises your Modified Adjusted Gross Income (MAGI), and crossing 400% of the federal poverty level eliminates your premium tax credit entirely.

For 2026 the 400% FPL cliff is $62,600 for a single filer and $84,600 for a couple. A conversion that pushes you one dollar over can cost $12,000+ in clawed-back subsidies — often more than the state tax itself. We cover this in depth in the ACA subsidy cliff guide.

The takeaway: model state tax, federal tax, and the ACA cliff together, not separately. You can run all three at once in the QuantCalc Roth conversion and ACA calculator.

Frequently Asked Questions

Which states do not tax Roth conversions in 2026?

Nine states have no income tax and therefore never tax a Roth conversion: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. In addition, Illinois has an income tax but exempts the taxable portion of a Roth conversion as retirement income, so its effective state tax on conversions is also zero.

Does Illinois tax Roth conversions?

No. Although Illinois levies a flat 4.95% income tax, it exempts most retirement income — including the federally taxable amount of a traditional-to-Roth conversion. The amount is added back on Form IL-1040 and then subtracted on Line 5, leaving no Illinois tax on the conversion.

How much does a Roth conversion cost in state tax?

It depends on your state's marginal rate. In a no-tax state or Illinois it's $0. In a state like Georgia (5.39%) a $30,000 conversion costs about $1,617; in California (up to 13.3%) the same conversion can exceed $3,000. Multiply your conversion amount by your state's marginal rate for a quick estimate.

Does moving to a no-tax state before converting save money?

Yes, if you genuinely establish residency before the conversion. Because the conversion is taxed in the state where you're a resident when it occurs, relocating to a no-income-tax state ahead of a large multi-year conversion ladder can eliminate the state portion entirely. Confirm domicile rules carefully, as some former states aggressively audit part-year moves.

Do Roth conversions affect ACA subsidies?

Yes. A conversion increases your MAGI, and crossing 400% of the federal poverty level ($62,600 single / $84,600 couple in 2026) eliminates your ACA premium tax credit. For early retirees this subsidy clawback often dwarfs the income tax on the conversion, so model both together.