02 Apr Do Roth withdrawals count as Senior Freeze income?

Q. I have a Roth IRA. Do I have to count withdrawals as income for the Senior Freeze?
— Retiree

A. As you know, the Senior Freeze has income limits.

For the 2018 Freeze, annual income can’t exceed $87,268.

To qualify, you also must be 65, have lived in New Jersey for the past 10 years and have owned and occupied your current home for three years. And, your property tax bill must be up-to-date.

On income: According to instructions by the New Jersey Department of Treasury, you must “add the portion of any distribution from a Roth IRA you received that you would have reported if it were a traditional IRA,” said Deva Panambur, a certified financial planner with Sarsi, LLC in West New York.

That’s because the distribution would include accumulated earnings – the same as the part of the Roth withdrawal you would report in your New Jersey tax return for the year, Panambur said.

“Not included in the income, according to the instructions, are, ‘a direct rollover to another financial instrument, a tax-free exchange of a policy or contract between two insurance companies, or a conversion from an existing traditional IRA to a Roth IRA,’” he said.

Applications for the 2018 tax year must be filed by Oct. 31, 2019.

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This story was originally published on April 2, 2019.

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