Roth Conversion Strategy by State: Where Your Conversion Saves the Most

A Roth conversion in California costs roughly $13,300 more in state tax than the same conversion in Texas, on a $100,000 conversion for a married couple in the top state bracket. That single number explains why your zip code matters as much as your federal bracket when you're planning a conversion.

The 2026 Federal Window Is Real and It's Closing

The 2026 tax year is the first year operating under the new ordinary income brackets that took effect when the 2017 Tax Cuts and Jobs Act provisions fully sunset at the end of 2025. The 39.6% top federal rate is back. The 28% bracket now applies to taxable income above roughly $103,000 for single filers and $206,050 for married filing jointly.

For Roth conversion planning, this is the core tension. Rates are higher now than they were in 2024, but they could go higher still if Congress acts, and traditional IRA balances keep compounding into larger future required minimum distributions. Many advisors still recommend converting up to the top of the 22% or 24% bracket each year before the RMD clock forces larger distributions at worse rates.

The window most planners reference closes in 2028, when RMD ages and brackets fully interact for the large wave of baby boomers turning 73. Converting now, before that happens, locks in today's known rates.

Do You Pay State Tax on a Roth Conversion?

In most states, yes. A Roth conversion is treated as ordinary income for state tax purposes in 41 of the 50 states. The nine states with no income tax at all, Florida, Texas, Nevada, Wyoming, South Dakota, Alaska, Tennessee, New Hampshire, and Washington, charge zero state tax on a conversion. For a couple converting $150,000, that is a $9,750 to $19,890 difference compared to converting in New York or California.

Beyond the no-income-tax states, several states specifically exempt retirement income from taxation, which can include Roth conversion income depending on the state's definition. Illinois exempts all retirement income, including IRA distributions, though conversions are treated as ordinary income there and are taxed at the flat 4.95% rate. Pennsylvania exempts retirement distributions but taxes conversions as income at 3.07%. Mississippi exempts qualified retirement income but the conversion itself is taxable.

The practical answer: check whether your state taxes IRA withdrawals versus IRA conversions separately. Several states draw exactly that distinction.

State-by-State: The Real Cost Difference

Here is what state income tax adds to a $100,000 Roth conversion for a single filer already in the highest state bracket:

• California: 13.3% top rate, adds $13,300
• New York: 10.9% top rate, adds $10,900
• New Jersey: 10.75% top rate, adds $10,750
• Oregon: 9.9% top rate, adds $9,900
• Minnesota: 9.85% top rate, adds $9,850
• Vermont: 8.75% top rate, adds $8,750
• Iowa: 6.0% flat rate as of 2026, adds $6,000
• Georgia: 5.49% flat rate as of 2026, adds $5,490
• Illinois: 4.95% flat rate, adds $4,950
• Pennsylvania: 3.07% flat rate, adds $3,070
• Florida, Texas, Nevada, Wyoming, South Dakota, Alaska, Tennessee, New Hampshire, Washington: $0

If you are a California resident considering a $200,000 conversion, you owe up to $26,600 in state tax alone on top of your federal bill. A Nevada resident converting the same amount owes nothing to the state.

This is one reason our Best States for Retirees to Avoid Taxes analysis consistently ranks Florida, Nevada, and Wyoming at the top. Retirees who relocate before converting save substantially.

Timing a Move Before You Convert

Establishing residency in a no-income-tax state before executing a large Roth conversion is legal, common, and financially significant. The key requirement is that you must be a bona fide resident in the new state at the time of the conversion. States like California aggressively audit high-income departures and will claim tax on income earned while you were still a California domiciliary.

If you're planning a move and a conversion together, the order matters: complete the residency change first, document it thoroughly, then convert. For high balances, the savings justify the timing discipline.

For anyone still living in a high-tax state, partial conversions spread across multiple years reduce the marginal state bite. Converting $50,000 per year over four years versus $200,000 in one year can keep you out of the top state bracket in progressive-rate states. Use our Roth conversion calculator to model this scenario with your actual state rate.

For a fuller picture of how high-tax states affect your retirement income across multiple income types, see our breakdown of States That Don't Tax Social Security and our analysis of Estate Tax by State, where Roth assets pass to heirs tax-free regardless of state.

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Key Takeaways

• A $100,000 Roth conversion costs $13,300 more in California state tax than in Florida, Texas, or any other no-income-tax state.
• Nine states charge zero state income tax on conversions. Several others, including Illinois and Pennsylvania, tax conversions at flat rates below 5%.
• The strategic window before RMD pressure intensifies runs through approximately 2027. High-balance IRA holders in high-tax states should model a pre-conversion relocation now.

Compare your current state against potential relocation targets using our state tax comparison tool at liveordiehere.com.