Any taxpayer holding a traditional IRA can convert part or all of it into a Roth IRA regardless of how much they earn, a rule that has been in place since 2010 when Congress removed the prior $100,000 adjusted gross income cap. Because Roth IRAs carry no required minimum distributions during the owner’s lifetime, each dollar converted is a dollar that will never be subject to forced annual withdrawals. That dynamic takes on fresh urgency as SECURE 2.0 pushes RMD starting ages higher, giving traditional IRA balances more time to grow and exposing retirees to larger taxable distributions down the road.
Why the absence of a conversion income cap matters in 2026
Before 2010, only taxpayers with adjusted gross income below $100,000 could move traditional IRA money into a Roth. The Tax Increase Prevention and Reconciliation Act, known as TIPRA (P.L. 109-222), removed the AGI limit starting in tax year 2010. Since then, a surgeon earning $800,000 and a teacher earning $55,000 have had the same right to convert. The IRS draws a clear line between Roth IRA contributions, which still carry income phase-outs, and conversions, which do not. Guidance in Publication 590-A includes a dedicated section on moving funds from a traditional IRA to a Roth, reinforcing that conversions remain open to all filers.
The practical payoff centers on RMDs. The IRS states in its RMD FAQs that the minimum distribution rules do not apply to Roth IRAs while the owner is alive. Every dollar shifted out of a traditional IRA and into a Roth reduces the traditional balance used to calculate future RMDs. For someone who has accumulated a large pre-tax balance over decades of contributions and market growth, that reduction can translate into meaningfully lower taxable income in retirement.
SECURE 2.0 amplified this effect by raising the age at which RMDs begin, allowing traditional IRA balances to compound longer before withdrawals start. Larger balances at the starting line mean larger annual RMDs, potentially pushing retirees into higher tax brackets. Converting in the years before RMDs kick in lets a taxpayer pay tax at today’s known rate rather than gamble on what rate will apply to a bigger forced withdrawal later. The hypothesis that higher-income filers will accelerate conversions during this window is logical, though no public IRS dataset currently breaks out annual conversion volumes by income bracket in a way that would confirm the trend in real time.
How the IRS treats conversions and what taxpayers report
A conversion from a traditional IRA to a Roth is treated as a taxable distribution followed by a rollover into the Roth account. Federal regulations under 26 CFR 1.408A-4 spell out the mechanics: the converted amount is included in gross income for the year of the conversion, minus any portion attributable to nondeductible contributions. The custodian issues Form 1099-R reporting the distribution, and if the funds move directly to the Roth IRA, it is coded as a conversion rather than a simple withdrawal.
Taxpayers calculate the taxable portion of a conversion on Form 8606, Part II. The form tracks basis from prior nondeductible contributions and applies the pro rata rule so that each conversion carries a mix of pre-tax and after-tax dollars. According to the instructions for Form 8606, failing to file when required can trigger penalties, and it also risks losing documentation of basis that would otherwise reduce taxable income on future conversions or distributions.
Because a conversion is voluntary and fully taxable (to the extent of pre-tax amounts), timing is central. Many households consider converting in lower-income years-such as early retirement before Social Security and RMDs begin-or in years with large deductions that can offset the added income. Others pace conversions across several tax years to avoid pushing themselves into a much higher marginal bracket in a single year. The lack of an income cap means this kind of bracket management is available to high earners as well as middle-income savers.
Planning around the 2026 tax landscape
The scheduled sunset of several individual tax provisions after 2025 adds another layer. If tax rates rise in 2026, paying tax on conversions in 2024 and 2025 could look relatively attractive for some filers. Conversely, if Congress extends current rates or enacts new cuts, rushing to convert could prove less advantageous. Because future law is uncertain, planners often frame Roth conversions as a hedge: paying a known rate today to reduce exposure to potentially higher rates later, while also trimming future RMDs.
SECURE 2.0’s higher RMD ages widen the pre-RMD window in which this hedge can be implemented. For workers who continue earning well into their 60s, that may mean a limited number of low-income years between full retirement and the onset of RMDs. For others who retire earlier, it may create a decade or more in which conversions can be layered in gradually. In both cases, the enduring absence of an income cap on conversions keeps the strategy available regardless of prior earnings history.
Ultimately, whether to convert-and how much-depends on projected lifetime tax brackets, cash on hand to pay the conversion tax, estate planning goals, and risk tolerance about future law changes. What is clear from existing statutes and IRS guidance is that the door to Roth conversions remains wide open in 2026, and the combination of higher RMD ages and potential tax law shifts is likely to keep that door busy.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
