No, the Roth IRA distribution is not taxable nor subject to penalty.
A code T in box 7 of 1099-R is for a Roth IRA distribution, when an exception applies. It is used for a distribution from a Roth IRA if the IRA custodian does not know if the 5-year holding period has been met but:
- The participant has reached age 59 & 1/2
- The participant died, or
- The participant is disabled
Source: DDollar
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