Roth IRA Withdrawl before age 59.5

[TRV1]

I am 53 years old and have a Roth IRA with contributions well over 5 years old.  Can I withdraw an amount equal to a $ amount contribution made greater than 5 years ago without the 10% penalty or tax?  What code would show up on the 1099R so that I don't have to pay tax or a penalty when filing on Turbo Tax in 2021?

[macuser_22]

Yes.  You can always withdraw you own past contribution tax and penalty free, only the earnings would be subject to tax and penalty.   There is no code that says that since the IRA trustee cannot know what other accounts yiu might have since contributions are the aggregate total of all Roth accounts that you might have.   You must enter the amount of prior contributions (not already withdrawn) into TurboTax to calculate the taxable amount which would be zero if only contributions distributed.

[dmertz · Accepted solution]

Since you are under age 59½, the amount of time that you have had a Roth IRA is largely irrelevant.  No matter how long you have had a Roth IRA, you can always withdraw any of your regular Roth IRA contributions without any tax or penalty.

The fact that you have had a Roth IRA for more than 5 years just means that what you reach age 59½ you can take any amount out of your Roth IRAs, including earnings, without any tax or penalty.

Code J is the code the will be in box 7 of the Form 1099-R reporting any regular distribution from a Roth IRA made before reaching age 59½.  Because the distribution will be a nonqualified distribution, your tax return must include Form 8606 to calculate the taxable amount of the distribution, which will be $0 if the distribution is no more than the amount of the regular contributions that were in your Roth IRAs.  With a taxable amount of $0, the distribution will not be subject to any early-distribution penalty.

(If your Roth IRA was funded with taxable Roth conversions, there is a different 5-year rule that applies where a distribution of amounts attributable to the taxable Roth conversion will be subject to the 10%  early-distribution penalty on that amount if distributed prior to the end of 5 years from the beginning of the year that you converted this amount to Roth and you are under age 59½.)