Early Withdrawal Penalties - Traditional and Roth IRAs - Tax Articles & Tax Tips - H&R Block(R)

Early Withdrawal Penalties - Traditional and Roth IRAs – Tax Articles & Tax Tips – H&R Block®

You've already paid tax on your Roth IRA contributions. So, you can withdraw your regular contributions at any time and at any age with no penalty or tax. After you withdraw an amount equal to all of your regular contributions, the earnings will be taxable. This is only true if the distribution isn't a qualified distribution. If the distribution is qualified, then your distribution won't be taxed.

All of your Roth IRAs are treated as one for withdrawal purposes. It doesn't matter how many Roth IRA accounts you have.

Converted amounts and early withdrawal penalty
You can convert a traditional IRA to a Roth IRA. To take a tax-free distribution, the money must stay in the Roth IRA for five years after the year you make the conversion.

If you withdraw contributions before the five-year period, you might have to pay a **fdEarly DistPenalty1** penalty. This is an early withdrawal penalty on the entire distribution. You usually pay the 10% penalty on the amount you converted. A separate five-year period applies to each conversion.

If you're at least age 59 1/2 when you make the withdrawal, you won't pay the 10% penalty. This applies no matter how long the money is in the account. You also won't pay a penalty if you:

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