Roth IRA Distributions

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In general, you do not include in your gross income qualified distributions from your Roth IRA. You may have to include part of other distributions from Roth IRA(s) in your income.

A qualified distribution is generally, any payment or distribution made after the 5-taxable-year period beginning with the first year for which a contribution was made to a Roth IRA set up for you, and that is made on or after you reach age 59 1/2, made because you are disabled, made to a beneficiary or to your estate after your death, or that is made to buy, build, or rebuild a first home.

A distribution used to buy, build or rebuild a first home must be used to pay qualified costs for the main home of a first time home buyer who is either yourself, your spouse, or you or your spouse's child, grandchild, parent, or other ancestor. When added to all your prior qualified first-time homebuyer distributions, if any, the total distributions cannot be more than $10,000.

Part of any distribution that is not a qualified distribution may be taxable as ordinary income and subject to the additional 10% tax on early distributions. Distributions of conversion contributions within a 5-year period following a conversion may be subject to the 10% early distribution tax, even if the contributions have been included as income in an earlier year. Refer to Tax on Early Distributions From Retirement Plans , Early Distributions from IRA's, for more information.

If you converted your traditional IRA to a Roth IRA, but were not eligible to do so, your conversion will be treated as a taxable distribution from your traditional IRA and a regular contribution to your Roth IRA, and may be subject to additional tax on early withdrawals and an excise tax on excess contributions, unless the converted amount is recharacterized.

You may recharacterize your Roth IRA conversion by directly transferring the amount converted (including all net earnings from the date of conversion) back to a traditional IRA. You may do this prior to the due date, including extensions, for filing your tax return. Show the conversion on Form 8606 (PDF). Refer to the Form 8606 instructions for information on reporting recharacterizations.

Refer to Roth IRA Contributions for information about Roth IRA contributions. For more information about all types of IRAs, refer to Publication 590, Individual Retirement Arrangements.


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