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I contributed to a Roth IRA in April 2015 for tax year 2014. Am I able to use that money as a down payment for a first time home purchase now?

I believe 5-year Roth IRA rule for a first time home purchase would apply if I opened the Roth IRA account in 2014. But I opened the account in 2015 and contributed to it for the tax year 2014. Does that satisfy the 5-year rule to use the Roth IRA earnings for a first time home purchase?

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dmertz
Level 15

I contributed to a Roth IRA in April 2015 for tax year 2014. Am I able to use that money as a down payment for a first time home purchase now?

Yes.  Because you made your first Roth IRA contribution for 2014, the 5-year clock started on January 1, 2014.  Any earnings that are distributed in 2019 or later that you apply to a first home purchase are tax free in addition to being penalty free.

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dmertz
Level 15

I contributed to a Roth IRA in April 2015 for tax year 2014. Am I able to use that money as a down payment for a first time home purchase now?

Yes.  Because you made your first Roth IRA contribution for 2014, the 5-year clock started on January 1, 2014.  Any earnings that are distributed in 2019 or later that you apply to a first home purchase are tax free in addition to being penalty free.

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