Will rolling my old 401(k) into an IRA make my backdoor Roth taxable?

By Kaz · Published 28 September 2026 · How this site checks figures

Summary

Yes, partly, if the pretax money from the 401(k) is still in a traditional IRA on December 31 of the year you convert. Form 8606 sets the tax-free share of a conversion as your after-tax basis divided by the year-end value of all your traditional IRAs plus that year's distributions and conversions, and a rollover IRA is one of those traditional IRAs. Pretax money that stays in a 401(k) is not in that year-end value, so it does not change the result.

The fraction that does the damage

On the 2025 Form 8606, line 6 asks for "the value of all your traditional IRAs as of December 31, 2025, plus any outstanding rollovers." A note at the top of the form says that, unless stated otherwise, "traditional IRA" includes traditional SEP IRAs and traditional SIMPLE IRAs. Line 9 adds line 6 to the year's distributions (line 7) and conversions (line 8). Line 10 then says: "Divide line 5 by line 9." Line 5 is your basis, mostly the nondeductible contributions you made. Every pretax dollar sitting in a traditional IRA on December 31 makes line 9 larger and the tax-free fraction smaller.

As an example, say you put $7,000 of after-tax money into a traditional IRA and convert all of it. If that is your only IRA, line 10 comes out at 1.000 and the whole conversion is tax-free. Now add a $93,000 pretax rollover IRA from an old job. Line 9 becomes $100,000, line 10 becomes 0.070, and line 11, "the nontaxable portion of the amount you converted," is $490. The other $6,510 of the conversion is taxable. The rollover itself caused no tax; it changed the math on the conversion.

Why the order of events doesn't help

Because line 6 is a year-end number, doing the conversion in February and the rollover in November gives the same answer as doing them in reverse. What changes the result is where the pretax money sits on December 31.

The same date works in the other direction. Pretax IRA money that has moved into a current employer's 401(k) by December 31 is no longer part of line 6. The IRS lists "IRA-to-plan rollovers" among allowed moves, so a traditional IRA can go into a current employer's 401(k), but the plan on the receiving end can say no, since the IRS doesn't require it to take rollovers. Plan-by-plan acceptance is covered in the article on reverse rollovers.

After-tax 401(k) money is different

After-tax money in a 401(k) has the opposite effect. The Form 8606 instructions define basis as "the total of all your nondeductible contributions and your nontaxable amounts included in rollovers made to these IRAs," minus nontaxable distributions. After-tax dollars from a 401(k) that land in a traditional IRA add to the numerator, and the IRS also lets those after-tax dollars go straight to a Roth IRA in the same distribution, which the article on after-tax 401(k) money walks through.

Sources

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