Roth Conversion Breakeven by State (2026)

A Roth conversion is a voluntary decision to pay tax now — on money moved from a traditional IRA or 401(k) into a Roth — in exchange for tax-free growth and withdrawals later. Whether it pays off hinges on one comparison: the rate you pay to convert today versus the rate you would have paid on that money in the future. Federal tax is the same in every state, but the state slice of the bill is not, and it can swing the math. This study runs a predefined grid of 1,224 scenarios through QuantCalc's tax engine to show, for each jurisdiction, exactly what a conversion costs and where the breakeven sits.

*For the reference slice below: a single filer, age 62, $40,000 of existing retirement income, converting $50,000.

Headline findings: where a conversion costs the most (and least)

Reference slice: a single filer, age 62, with $40,000 of existing retirement income, converting $50,000. "State cost" is the extra state income tax the conversion triggers; "combined" adds the identical $8,350 federal cost. Effective rates are the cost divided by the $50,000 converted.

What drives the differences

Three structural features of a state's code explain almost all of the spread:

• No income tax at all. 9 jurisdictions levy no broad income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming), so a conversion adds exactly $0 of state tax there.
• Full retirement-income exemption states. A further 4 states do levy an income tax but exempt qualified retirement income so completely that — in the cases modeled here — the exemption reaches a traditional→Roth conversion too: Illinois, Iowa, Mississippi, and Pennsylvania. There the conversion still escapes state tax even though the state taxes wages. Together these two groups are why 13 jurisdictions show a $0 state cost in the reference slice.
• Ordinary-income states. Everywhere else, a conversion is just more ordinary income: it is taxed at the state's regular bracket rates, so the cost tracks the state's marginal rate on top of the filer's existing income. This is where the $4,375 bills come from — high-rate states like Oregon and Connecticut sit at the top precisely because they tax the conversion as ordinary income at a high marginal rate.

Age matters too, but less than you might expect for early retirees: many state retirement-income exclusions only switch on at age 65, so a 62-year-old often does not get them yet. That is one reason this reference slice uses age 62 — it shows the conversion cost before age-gated exclusions kick in. The full sweep below lets you compare age 62 against age 66 directly.

The breakeven: what future rate makes converting worth it

Converting today is worth it if the tax rate you avoid in the future is higher than the rate you pay now. Because a dollar converted today is taxed at today's combined effective conversion rate, and the same dollar (had you left it in the traditional account) would eventually be withdrawn and taxed at some future combined marginal rate, the two break even at exactly one point:

The table below is that identity, per state, for the reference slice. Read each row as: "convert now only if you expect your future combined marginal rate to exceed this."

Full sweep (1,224 scenarios)

Every scenario in the grid: 51 jurisdictions × filing (single / MFJ) × age (62 / 66) × existing retirement income ($40,000 / $80,000) × conversion ($25,000 / $50,000 / $100,000). Filter to a scenario, then click any column to sort. Download the CSV/JSON for the full dataset with all derived columns.