Solved
Roth IRA Penalty
In 2017 I contributed to a Roth IRA for tax year 2016. I want to withdraw it when it will not receive the 10% penalty. I'm now 60 years of age as of Aug 2020. When will the penalty not apply?
A Roth IRA withdrawal that is not qualified may be subject to regular income tax. A withdrawal is qualified if it is made after age 59-1/2 AND after 5 years after the first Roth contribution.
The exact wording is "It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit."
That means that, for a contribution made for taxable year 2016, the 5 year period is 2016-2020.
Because you are 60, you won't pay the extra 10% penalty for early withdrawal. You can always withdraw your contributions at any time without paying income tax or a penalty. If you withdraw earnings in 2020, they will be subject to regular income tax because you don't meet the 5 year test, but if you wait to 2021 to withdraw your earnings, they will be tax-free.
