- You can withdraw contributions at any time.
- If you withdraw earnings, the withdrawal might be qualified or unqualified. Qualified means the account owner is over age 59-1/2 AND the account is open more that 5 years.
- If you make an unqualified withdrawal and you are any age, you pay income tax on the earnings.
- If you make an unqualified withdrawal and you are under age 59-1/2, you also pay a 10% penalty on early withdrawals unless you qualify for an exception.
- The ordering rules mean that any time you withdraw from a Roth, you are first considered to withdraw contributions, rollovers second, and earnings last.
Code J means the withdrawal is not qualified (your wife is under age 59-1/2 or the account was opened less than 5 years ago). Turbotax should ask you for the amount of contribution and rollovers you made to the account and the amount of previous withdrawals, so the program can tell if you are withdrawing contributions, rollover contributions, or earnings. You will pay income tax and maybe the penalty if you are withdrawing earnings.
