What Recharacterization Can and Cannot Do (Post-2017)
Roth IRA recharacterization: what is and is not permitted
| Action | Allowed? | Deadline | Notes |
|---|---|---|---|
| Change Roth contribution to Traditional IRA contribution | Yes | October 15 of following year | Moves contribution + earnings to Traditional IRA |
| Change Traditional IRA contribution to Roth contribution | Yes | October 15 of following year | Moves contribution + earnings to Roth IRA |
| Undo a Roth IRA conversion (recharacterize back to Traditional) | No (banned since 2018) | Not applicable | Tax Cuts and Jobs Act 2017 eliminated this |
| Change the year a contribution applies to | Yes (via excess contribution process) | Before filing deadline | Different process — not traditional recharacterization |
Prior to 2018, you could undo a Roth conversion by recharacterizing it back to a Traditional IRA. This was eliminated by the Tax Cuts and Jobs Act. Recharacterization now ONLY applies to changing the TYPE of a regular annual contribution — not to conversions, which are permanent.
When You Might Want to Recharacterize
- You made a Roth IRA contribution and later discovered your income exceeded the limit — recharacterize to Traditional IRA to avoid the 6% excess contribution penalty
- You made a Traditional IRA deductible contribution and later realized you wanted Roth growth instead — recharacterize to Roth (if income allows)
- You contributed to Roth but want the Traditional deduction to reduce current-year tax — recharacterize to Traditional
- Tax situation changed mid-year: you expected to be in a lower bracket but ended up higher — the deduction from a Traditional contribution is more valuable
How to Execute a Recharacterization
Contact your IRA custodian before October 15 of the year following the contribution. Request a 'recharacterization' from Roth to Traditional (or Traditional to Roth). The custodian transfers the original contribution PLUS any earnings (positive or negative) attributable to that contribution to the other account type. Report the recharacterization on Form 8606. You cannot recharacterize a rollover or conversion — only regular annual contributions.
Project Your Roth IRA Growth
See how your contributions compound tax-free over time — whether contributed originally or after a recharacterization.