Wisconsin residents of all income levels will be able to convert a traditional individual retirement account to a Roth IRA without penalty because of legislation Gov. Jim Doyle signed Monday March 15. The state Assembly and Senate passed the bill in February. Doing so allows Wisconsin to catch up with the rest of the country. Federal law was changed to allow Roth conversions for people of all incomes without penalties as of Jan. 1. All other states adopted the standard, but Wisconsin continued to charge penalties for residents who earned more than $100,000 annually. Initial penalties were as high as 5.3% of money that was transferred, and 2% a year from there on.
The legislation will become law within 10 days and will be retroactive to Jan. 1.