House and Senate Pass Tax Bill

May 12, 2006 – The U.S. House and Senate both passed the Tax Increase Prevention and Reconciliation Act (H.R. 4297) this week, and President Bush is expected to sign the measure soon. 

One item affecting the retirement services industry in this $70 billion tax bill is a revenue-raising provision that would remove the $100,000 income limit for Roth IRA conversions. Once signed and enacted, this act will allow those individuals with income over that limit to convert Traditional and SIMPLE IRAs to Roth IRAs, beginning in 2010. Conversions in 2010 will qualify for optional ratable tax treatment over two years, in 2011 and 2012.