Roth IRA Early Distribution – Age over 59-1/2

[Anonymous]

My Roth IRA Account Status:

Contributions held more than 5 years.

Roth Conversion made in 2019; held less than 5 years.

Age over 59-1/2.

Questions:  I am taking a total distribution (contributions, conversion and earnings).  I understand that I am subject to tax for the earning portion for not meeting the 5 year holding period.

Am I exempted from the additional 10% tax (penalty) for early withdrawal?  I don’t know if over 59-1/2 is one of the exceptions for waiver of the additional 10% tax.

Thank you.

[dmertz · Accepted solution]

This would not be an early distribution.  A distribution taken from a Roth IRA after you have reached 59½ (as in this case) and it has been more than 5 years since the beginning of the year for which you first made a Roth IRA contribution (as in this case), any distribution you receive from your Roth IRAs is a qualified distribution, tax and penalty free.  There is never an early-distribution penalty after age 59½.

There are two different types of 5-year holding period, one for determining qualified distributions, which you have met, and an entirely different one for determining whether a distribution of converted amounts before age 59½ are subject to a 10% penalty, which no longer applies to you.

[bubarsu]

I'm in this situation myself. I am over 59 1/2 and I started my ROTH over 5 years ago. I did a Roth conversion in 2019 and then I did another Roth conversion and a Roth distribution in 2020. Why is Turbotax making me enter all kinds of data when I meet the rules for the distribution to be a qualified distribution?

[MarilynG1]

@bubarsu Since we can't see your tax return in this forum, are you entering your Roth Basis correctly?

Review your Form 8606.  Click this link for more info on Form 8606.