How do I take a Roth IRA distribution of principle amounts (contributions and conversions)?

[alenkeln]

I do not want to touch the earnings and plan to leave inside the Roth IRA. 2 years remain of two of the conversion contributions. Since I have already paid tax on these principle amounts ; may I withdraw without penaltys and fees? 

[dmertz]

The ordering rules for Roth IRA distributions are automatic.  Form your own records, you yourself must establish the amount of your Roth IRA contributions, which come out first, and the amount of your conversions which come out next.  Amounts distributed before age 59½ from your basis in taxable conversions that have not completed the 5-year conversion holding period are subject to a 10% additional tax unless you have an exception to that penalty.

Ordering rules:  https://www.irs.gov/publications/p590b#en_US_2022_publink100089915

[NCperson]

@alenkeln - how old are you? that simplifes matters if you are over 59,5 as there is no 10% penalty, which is the same as a TRAD IRA.  Conversions can always be distributed without additional tax (because you already paid the tax when contributed); but 10% penalties may apply, based on the chart below.

here are the rules:

as noted, the IRS presumes that all Contributions are distributed first, all Conversions next and Earnings Last.  

	Under 59.5 years old	Over 59.5 years old
Roth opened less than 5 calendar years	Contribution: no penalty and no tax liability Conversions: 10% penalty and no tax liability Earnings: 10% penalty and tax liability (exceptions apply)	Contribution: no tax liability Conversion: no tax liability Earnings: tax liability (exceptions apply)
Roth opened at least 5 calendar years	Contribution: no penalty and no tax liability Conversions:  no penalty on contributions made at least 5 years ago; 10% penalty for contributions made in the last 5 years; no tax liability Earnings: 10% penalty and tax liability (exceptions apply)	Contribution: no tax liability Conversion: no tax liability Earnings: no tax liability

[dmertz]

@NCperson , that chart is a bit incomplete because it does not address the difference between distributions involving basis in taxable Roth conversions and distributions involving basis in nontaxable Roth conversions.  (Distributions of basis in nontaxable Roth conversions are never subject to the 10% early-distribution penalty.)  Many people make nontaxable Roth conversions with the backdoor method.  IRS Pub 590-B provides the complete information.

[alenkeln]

• My age is 76... Roth opened in 2002. I have made two recent conversions from trad IRA: 57K tax paid  but converted to Roth in 2019 and 110K tax paid but converted to Roth in 2020. For these two basis conversions in to Roth will I be subject to 10% penalty, if I take a distribution now of these two basis and all past basis (contribution & conversions) only leaving all earnings to remain in the Roth account?

In year 2025, I should be able to withdraw earnings tax free and no 10% penalty.

[NCperson]

THere is no further tax and no penalties on any component of your Roth IRA

you are over 59.5 years old so there is no 10% penalty on any component of the Roth IRA. 

The Roth has been open for at least 5 years and you are over 59.5 years old, so there is no  tax on the earnings.. 

you can distribute the entire Roth IRA now (including the earnings) with no further tax and no further penalties.  There is no need to wait until 2025.

here is an IRS tool that will confirm that for you.  Takes about 5 minutes to complete:

https://www.irs.gov/help/ita/is-the-distribution-from-my-roth-account-taxable

[Opus 17]

---

@alenkeln wrote:

• My age is 76... Roth opened in 2002. I have made two recent conversions from trad IRA: 57K tax paid  but converted to Roth in 2019 and 110K tax paid but converted to Roth in 2020. For these two basis conversions in to Roth will I be subject to 10% penalty, if I take a distribution now of these two basis and all past basis (contribution & conversions) only leaving all earnings to remain in the Roth account?

In year 2025, I should be able to withdraw earnings tax free and no 10% penalty.

---

If you are over age 59-1/2 and the Roth IRA has been opened at least 5 years, then all withdrawals are tax and penalty free no matter the original source of the funds.