I am retired and just shy of 60 years old. I have a traditional IRA and a Roth IRA. I did a conversion into my Roth from my traditional IRA in April of this year of 80k and paid the taxes when I did the conversion of 11% federal and 4% California tax. I understand that I am responsible for any taxes that may be due when I file next year. My question is, if and when I withdraw from the Roth will that amount be considered Income as far as the ACA ( Covered California in my case ). I have contacted Covered California and they don't think it will be added to my MAGI but of course they tell you to contact a tax professional to be sure. Also, when the conversion was done I was over 59 1/2. So, will this be considered a qualified withdrawal/distribution if I withdraw from the Roth or will I have to pay the Tax credits I receive for health care back? Thanks for your help.

My question is, if and when I withdraw from the Roth will that amount be considered Income as far as the ACA ( Covered California in my case ). I have contacted Covered California and they don't think it will be added to my MAGI but of course they tell you to contact a tax professional to be sure. ========>>>>taxable; the basic idea behind Roth IRAs is to take only distributions that qualify for exemption from tax. If your distributions are taxable, you’re required to treat them as ordinary income. You can’t treat them as capital gain, even if the IRA received the earnings as capital gain. You must pay tax on the remaining as you didn’t satisfy the five-year test. But no penalty applies because you’re over age 59½.


Also, when the conversion was done I was over 59 1/2. So, will this be considered a qualified withdrawal/distribution if I withdraw from the Roth or will I have to pay the Tax credits I receive for health care back?==========>No; because you didn’t satisfy the five-year test.