diff --git a/pkg/apis/v1/labels.go b/pkg/apis/v1/labels.go
index 46d28573b..e404f5682 100644
--- a/pkg/apis/v1/labels.go
+++ b/pkg/apis/v1/labels.go
@@ -49,6 +49,7 @@ const (
 	KubeletCompatibilityAnnotationKey          = CompatibilityGroup + "/v1beta1-kubelet-conversion"
 	NodeClassReferenceAnnotationKey            = CompatibilityGroup + "/v1beta1-nodeclass-reference"
 	NodeClaimTerminationTimestampAnnotationKey = Group + "/nodeclaim-termination-timestamp"
+	StoredVersionMigratedKey                   = Group + "/stored-version-migrated"
 )
 
 // Karpenter specific finalizers
diff --git a/pkg/apis/v1/nodeclaim_conversion.go b/pkg/apis/v1/nodeclaim_conversion.go
index 8deec9276..bc0989171 100644
--- a/pkg/apis/v1/nodeclaim_conversion.go
+++ b/pkg/apis/v1/nodeclaim_conversion.go
@@ -47,6 +47,8 @@ func (in *NodeClaim) ConvertTo(ctx context.Context, to apis.Convertible) error {
 	// Remove the annotations from the v1beta1 NodeClaim on the convert back
 	delete(v1beta1NC.Annotations, KubeletCompatibilityAnnotationKey)
 	delete(v1beta1NC.Annotations, NodeClassReferenceAnnotationKey)
+	// Drop the annotation so when roundtripping from v1, to v1beta1, and back to v1 the migration resource controller can re-annotate it
+	delete(v1beta1NC.Annotations, StoredVersionMigratedKey)
 	return nil
 }
 
diff --git a/pkg/apis/v1/nodeclaim_conversion_test.go b/pkg/apis/v1/nodeclaim_conversion_test.go
index 46aa11894..ab4fdde9c 100644
--- a/pkg/apis/v1/nodeclaim_conversion_test.go
+++ b/pkg/apis/v1/nodeclaim_conversion_test.go
@@ -98,6 +98,19 @@ var _ = Describe("Convert v1 to v1beta1 NodeClaim API", func() {
 		v1beta1nodeclaim.Annotations = nil
 		Expect(v1beta1nodeclaim.ObjectMeta).To(BeEquivalentTo(v1nodeclaim.ObjectMeta))
 	})
+	It("should drop v1 specific annotations on conversion", func() {
+		v1nodeclaim.ObjectMeta = test.ObjectMeta(
+			metav1.ObjectMeta{
+				Annotations: map[string]string{
+					StoredVersionMigratedKey: "true",
+				},
+			},
+		)
+		v1nc := v1nodeclaim.DeepCopy()
+		Expect(v1nodeclaim.ConvertTo(ctx, v1beta1nodeclaim)).To(Succeed())
+		Expect(v1nc.Annotations).To(HaveKey(StoredVersionMigratedKey))
+		Expect(v1beta1nodeclaim.Annotations).NotTo(HaveKey(StoredVersionMigratedKey))
+	})
 	Context("NodeClaim Spec", func() {
 		It("should convert v1 nodeclaim taints", func() {
 			v1nodeclaim.Spec.Taints = []v1.Taint{
diff --git a/pkg/apis/v1/nodepool_conversion.go b/pkg/apis/v1/nodepool_conversion.go
index ffb59a584..d817fdfd3 100644
--- a/pkg/apis/v1/nodepool_conversion.go
+++ b/pkg/apis/v1/nodepool_conversion.go
@@ -44,6 +44,8 @@ func (in *NodePool) ConvertTo(ctx context.Context, to apis.Convertible) error {
 	// Remove the annotations from the v1beta1 NodeClaim on the convert back
 	delete(v1beta1NP.Annotations, KubeletCompatibilityAnnotationKey)
 	delete(v1beta1NP.Annotations, NodeClassReferenceAnnotationKey)
+	// Drop the annotation so when roundtripping from v1, to v1beta1, and back to v1 the migration resource controller can re-annotate it
+	delete(v1beta1NP.Annotations, StoredVersionMigratedKey)
 	return nil
 }
 
diff --git a/pkg/apis/v1/nodepool_conversion_test.go b/pkg/apis/v1/nodepool_conversion_test.go
index 305b58f7c..90bf46d79 100644
--- a/pkg/apis/v1/nodepool_conversion_test.go
+++ b/pkg/apis/v1/nodepool_conversion_test.go
@@ -78,6 +78,19 @@ var _ = Describe("Convert V1 to V1beta1 NodePool API", func() {
 		Expect(v1nodepool.ConvertTo(ctx, v1beta1nodepool)).To(Succeed())
 		Expect(v1beta1nodepool.ObjectMeta).To(BeEquivalentTo(v1nodepool.ObjectMeta))
 	})
+	It("should drop v1 specific annotations on conversion", func() {
+		v1nodepool.ObjectMeta = test.ObjectMeta(
+			metav1.ObjectMeta{
+				Annotations: map[string]string{
+					StoredVersionMigratedKey: "true",
+				},
+			},
+		)
+		v1np := v1nodepool.DeepCopy()
+		Expect(v1nodepool.ConvertTo(ctx, v1beta1nodepool)).To(Succeed())
+		Expect(v1np.Annotations).To(HaveKey(StoredVersionMigratedKey))
+		Expect(v1beta1nodepool.Annotations).NotTo(HaveKey(StoredVersionMigratedKey))
+	})
 	Context("NodePool Spec", func() {
 		It("should convert v1 nodepool weights", func() {
 			v1nodepool.Spec.Weight = lo.ToPtr(int32(62))