IRA conversion to ROTH lived in multiple states

IRA conversion to ROTH lived in multiple states
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#1

I rented a house in Arizona as a retiree from January through August, then moved to Nevada in September. I had no taxable income while I was living in Arizona except perhaps what I may have earned for interest income or dividends (small amounts relatively). I do need to file to California only because my past employer decided to pay me severance pay in 2018 for 2017 and prior employment ( I left Calif in December of 2017). In December 2018, I had $15,000 of my retirement Regular IRA account converted to a Roth IRA, of course, that is taxable. But is this conversion taxable in whole, or in part, or not at all, to the state of Arizona? This is my only problem I am having relative to my entire tax return for 2018, it seems over-kill paying a CPA to do the entire return when I only need the question regarding the Roth conversion resolved. Any suggestions? Thanks.


#2

Hi @bruce0712 and welcome to the NerdWallet community! This is one of those tax questions that can be so hard to answer. In looking at the Arizona tax information site, I tend to think that maybe you wouldn’t owe Arizona state tax on the IRA distribution since you’d already moved before receiving it – but I could easily be misreading that site. I am definitely not an expert in state tax laws, so I do think consulting with a tax pro on this would be smart. In case it’s helpful, here’s the Arizona tax info I was looking at: https://azdor.gov/individual-income-tax-information.

Separately, we’ve got a story on 9 ways to find free tax help – maybe one of those options can help?

Sorry I can’t be more help. My fingers are crossed :crossed_fingers: others in the community might weigh in on this question.


#3

I’m going to echo Andrea’s suggestion. You wouldn’t necessarily have to hire someone to file the whole return, but you would want to find somebody experienced at handling multi-state returns. You would have to shell out some money, but you might have to shell out a lot more if you guess wrong.