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The-JOE
New Member

Why am I being asked to "Enter Prior Year Roth IRA Contributions" ? I have not taken any distributions and I have been contributing to my roth for 20+ years.

 
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1 Reply
KarenM90
Intuit Alumni

Why am I being asked to "Enter Prior Year Roth IRA Contributions" ? I have not taken any distributions and I have been contributing to my roth for 20+ years.

TurboTax "saves" the information on your prior year Roth IRA contributions to determine if earnings should be taxed on any current or future distributions.  For example, if you just started contributing to your Roth IRA last year, and you withdrew those funds early, you could be subject to penalties and/or tax on earnings.  

 

Here is some more information on distributions from Roths:  

 

You can always withdraw contributions (but not earnings) that you made to your Roth IRA tax and penalty free at anytime

 

Additionally, the Ordering rules for withdrawals from a Roth IRA are: first from regular contributions, then from Conversion and rollover contributions, on a first-in, first-out basis and finally from Earnings on contributions.

 

Please note: A qualified distribution from a Roth IRA is tax-free and penalty-free, provided that the five-year aging requirement has been satisfied and one of the following conditions is met:

  • Over age 59½
  • Death or disability
  • Qualified first-time home purchase
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