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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

IRA Distributions as Income?

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Question: I am going off my work insurance at the end of the month and am on Cal SDI from an injury as my only current income. Should I withdraw at least $16100 from my IRA to qualify for Covered California? I do not qualify for Medical. I anticipate my AGI to be about $20,000 this year, including IRA withdrawals. Is it OK to withdraw it as a lump sum and is it OK to convert to ROTH?

Answer: Yes. If you withdraw money from your IRA it as taxed as income. That income will be included in your AGI. At $20k, for a one-person household, you will be eligible for Silver 87 coverage and cost-sharing reductions. Using some of that IRA income to fund a Roth IRA would be very smart if you don't need the money otherwise.

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