Alaska State Legislature
News from the House Majority

Jerry Ritter, House Majority Press Secretary
State Capitol
Juneau, AK 99801
Phone: (907) 465-3804
http://www.akrepublicans.org
Actuality Line: 1-800-478-6540

House Passes Measure to Benefit IRA Holders

Opportunity to Convert IRA Earnings to Tax-Free Status

For Immediate Release: March 19, 1998 Contact: Rep. Gene Therriault at (907) 465-4993.

Juneau – The Alaska House of Representatives Thursday passed House Bill 449, which permits Alaskans to receive the full benefits from Roth IRA accounts.

Congress created Roth IRA accounts in the 1997 Taxpayer Relief Act. Taxpayers are permitted to make non-deductible contributions to a Roth IRA and then take all distributions from the account tax-free under certain specified conditions. In addition, for 1998 only, those distributions can be spread-out over four years for tax purposes. However, under existing state laws, any such contributions lose existing protections against creditors.

"This is a great opportunity to convert all future IRA account earnings into tax-free income and spread the current tax bite over four years," said Representative Gene Therriault (R-Fairbanks), sponsor of HB 449. "Under this measure, any such conversions will continue to be protected against creditors," Therriault said.

The conversion option is only available in 1998. Beginning in 1999, distributions from regular IRA accounts which are rolled into Roth IRAs will be fully taxed in the year of the rollover.

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