dmertz
Level 15

Retirement tax questions

You are correct.  However, the 5-year Roth IRA qualification clock began running on January 1 of the year for which you first made a Roth IRA contribution.  The 5-year qualification clock for your Roth 401(k) does not transfer to your Roth IRAs with the rollover.  Until the 5-year qualification period for your Roth IRAs has been completed, any Roth IRA earnings distributed will be subject to ordinary income tax.

 

If you made your first Roth IRA contribution for some year prior to 2021, any distributions you take from your Roth IRAs in 2025 and beyond will be qualified distributions and there would be no need to know your basis in Roth IRA contributions and Roth conversions.