Wisconsin tax tidbit: Roth conversions

Wisconsin residents who convert their traditional IRAs to Roths this year won't have to worry about doing double tax calculations. Badger State lawmakers have adopted the same Roth conversion rules as Uncle Sam.

Whenever Congress makes changes, federal-state tax law conformity is always an issue. Many times and for many reasons, states don't follow the U.S. tax code and that creates all sorts of headaches for filers.

But thanks to a new Wisconsin law, all of the state's higher-income taxpayers who opt under the new federal law to turn their old IRAs into Roths this year also will be able to postpone, if they wish, their state tax payments on converted amounts until they file their 2011 and 2012 returns.

In addition, the law that provides IRA conversion conformity also adopted certain provisions of the federal Heroes Earnings Assistance and Relief Tax Act of 2008. That law provides several benefits for members of the military.

Wisconsin officials say that residents who in 2008 or 2009 adjusted for income differences that were allowed at the federal level but not on their state returns may now file an amended Wisconsin income tax return (Form 1X) to reverse the adjustments.

And taxpayers who have not as yet filed their 2009 Wisconsin income tax returns may ignore the state's Schedule I adjustment for the Heroes items.

Tax trip around the United States: This post is part of our series highlighting tax information from the 50 U.S. states and Washington, D.C. You can read other state tax blurbs at our Complete menu of tasty state tax tidbits.

The State Tax Departments page provides links to official state and District of Columbia revenue Web sites so that you can find out more about your home's tax laws and filing requirements.

As we work through the 2010 tax season, a different state will be featured each day as noted in Don't forget your state taxes! Check back to see what tax tidbit we share about your home.

Related posts:

• State Tax Tidbits
• State Tax Departments
• Don't forget your state taxes! 
• Roth IRAs and your retirement income
• Taxes on your tax rebate
• Honoring our military, personally and via tax breaks

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