TurboTax

File with experts
File your taxes
Experts at your fingertips

An expert helps with your taxes, or does them for you
TurboTax Expert Full Service

TurboTax Expert Assist

TurboTax Self-Employed
Prior year taxes
File myself
File myself
Do it yourself

We'll guide you step-by-step
TurboTax Do It Yourself

TurboTax Self-Employed

TurboTax Desktop
TurboTax Free

Activate your product

Prior year taxes
Business
Business
Business taxes

Get your T2 corporate return done right, your way
TurboTax Business

TurboTax Business Desktop
Tax situations
Tax situations
Tax situations

Find extra guidance for your big life moves
For investors

For 25 and younger

For self-employed

For new to Canada

For life changes
Resources
Resources
Resources

Explore tax tools, get tips, and read reviews
Personal income tax calculator

RRSP savings calculator

Learning hub

TurboTax support (FAQ)

TurboTax community
Pricing

Level 2

Question

Roth 5 year rule

Forum|Forum|5 years ago
March 12, 2021
1 reply
8 views

I need clarification on the 5 year rule. I took a Roth distribution which included the principal and interest earnings. The Roth IRA was opened in April 2017 and designated for the 2016 tax year, therefore I believe that the 5 year clock starts ticking on Jan1 2016 and the 5 year requirement has been met as of Jan 1 2021, and the interest is not taxable. Do I have this correct?

Thanks!

Level 15

To be a "qualifying" distribution, you must meet both the age test and the 5 year test. If you are over age 59-1/2, then the entire distribution is tax-free because you meet the age and 5 year rules. However, if you are under age 59-1/2, then you will owe income tax plus a 10% early withdrawal penalty on the gains in the account.

Level 2

Thanks for your response!