Taxed or penalized? For withdrawing from Roth IRA. 1 to transfer to another Roth IRA, 2 to keep, 3 to transfer again to other work Roth IRA

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All are contribution moneys and transfers are within 60 days

[Opus 17]

If you withdraw the money to your own bank account, you have 60 days to return it, or deposit it to another Roth IRA without any tax consequences.  This is a rollover, but you can only do one such rollover per year.  (If you do a direct electronic transfer between two plans, you can do that an unlimited number of times per year, but you can only do a rollover where the money passes through your hands once per year.)

If you keep the money, the tax consequences depend on whether the money is from contributions, a conversion, or earnings; and how old you are. 

[Opus 17]

When you withdraw (and keep) money from a Roth IRA, you are always deemed to withdraw contributions first, conversions second, and earnings last.  For example, suppose your contributions over the years are $50,000, and the value is $75,000.  If you withdraw $40,000, it is all contributions, and your remaining balance is $10,000 of contributions and $25,000 of earnings.    If you withdrew $60,000, then your withdrawal is $50,000 contributions and $10,000 earnings, and your remaining balance is all earnings.  This is important for future withdrawals.  then, the tax consequences are:

	Under age 59-1/2	Over age 59-1/2
Withdrawal of contributions	Never taxable	Never taxable
Withdrawal of conversions*, if the conversion was less than 5 years previous	No income tax, but subject to a 10% penalty for early withdrawal	Not taxable
Withdrawal of conversions, if the conversion was more than 5 years previous	Not taxable	Not taxable
Withdrawal of earnings, if it is less than 5 years since you opened your first Roth IRA**	Subject to income tax plus a 10% penalty for early withdrawal	Subject to income tax, but no additional penalty for early withdrawal
Withdrawal of earnings, if it is more than 5 years since you opened your first Roth IRA	Subject to income tax plus a 10% penalty for early withdrawal	Not taxable

*Each conversion has a separate 5 year clock

**A Roth account inside a 401k or 403b does not start the 5 year clock for Roth IRAs.  IRAs are controlled by different laws than workplace plans.