Post-SECURE 2.0: All RMDs Must Be Completed Prior to a Roth Conversion

As a reminder for clients as we approach the busy holiday season, clients who are interested in executing a Roth conversion must first take all RMDs for the year. This rule was included in the final RMD regulations released by the IRS earlier in 2024. Even when an individual holds multiple IRAs, all RMDs must be taken before executing a Roth conversion. Note that this rule does not apply to company-sponsored 401(k)s. While the RMDs for each IRA held by an individual must be calculated separately, the owner can take the actual RMDs from any IRA. When RMDs are due, any amounts withdrawn are first treated as RMDs for the year. RMDs also cannot be rolled over or converted. Prior to 2024, it was possible to execute a Roth conversion on an account where RMDs are due, when all RMDs from that particular account had been taken. Today, when someone owns multiple accounts, they must satisfy all RMDs before executing a Roth conversion with any traditional IRA funds. For more information on Roth conversions, visit Tax Facts Online. Read More: Link to Q3663.