The Roth IRA withdrawal rules treat your money as two separate buckets: contributions you can take out anytime, tax-free and penalty-free, and earnings that stay restricted until the distribution is qualified. Whether the earnings piece is taxed or penalized comes down to your age and how long the account has been open.
Roth IRA withdrawal rules split every account into contributions and earnings. Your contributions come out anytime, at any age, tax-free and penalty-free, because you already paid tax on them. Earnings are tax-free and penalty-free only in a qualified distribution: the account has been open 5+ tax years and you are 59½ or older (or death, disability, or a first-home purchase applies). For 2026 the IRA contribution limit is $7,500 (Source: IRS Notice 2025-67).
How the Roth IRA withdrawal rules split contributions from earnings
Roth IRA withdrawal rules divide each account into contributions and earnings, and the two follow different tax treatment. Contributions are the after-tax dollars you put in, and you can withdraw them at any time, at any age, free of tax and penalty. Earnings are the growth, and they stay restricted until the qualified-distribution test is met, because that money has never been taxed (Source: IRS Publication 590-B).
Talk With Craig Wear's Team
Craig has helped IRA millionaires save over $1 million each in unnecessary taxes. Find out if a Roth conversion strategy fits your retirement, with no sales pressure and no product pitch.
The ordering rule: which dollars come out first
When you take money from a Roth IRA, the IRS applies a fixed order no matter what you intend to withdraw. Distributions come out as regular contributions first, then converted or rolled-over amounts on a first-in first-out basis, and earnings last (Source: IRS Publication 590-B). This ordering lets many people under 59½ reach Roth cash with no tax.
- Regular annual contributions, always tax-free and penalty-free.
- Conversion and rollover amounts, oldest first, each with its own 5-year clock for the 10% tax on converted principal.
- Earnings, taxed and possibly penalized unless the distribution is qualified.
The two-part test for a qualified, tax-free distribution
Roth earnings escape both income tax and the 10% penalty only in a qualified distribution, and a qualified distribution requires two conditions at once. First, the account must satisfy the 5-taxable-year holding period. Second, one of these must be true: you are 59½ or older, or the distribution follows death, disability, or a first-time home purchase up to a $10,000 lifetime limit (Source: IRS Publication 590-B).
Both parts must be met together. Being 59½ is not enough if the account is under five years old, and five years alone is not enough if you are under 59½ with no other qualifying event.
The Roth IRA 5-year rule and when the clock starts
The Roth IRA 5-year rule sets the minimum holding period before earnings can be qualified. The clock generally starts on January 1 of the tax year for which you made your first Roth contribution, not the day you funded the account (Source: IRS Publication 590-B). A contribution made as late as the April filing deadline can still count for the prior tax year.
The 10% early-withdrawal penalty and its exceptions
The 10% additional tax applies to the part of a distribution that is includible in gross income when taken before age 59½ (Source: IRS Topic No. 558). For a Roth IRA that generally means the earnings portion of a non-qualified withdrawal, since returned contributions are never includible. Several exceptions waive the penalty even when the money is taxable.
The IRA exceptions to the 10% tax include (Source: IRS Publication 590-B; IRS Topic No. 558):
- Reaching age 59½.
- Death of the account owner.
- Total and permanent disability.
- Qualified higher-education expenses.
- First-time home purchase, up to a $10,000 lifetime limit.
- Unreimbursed medical expenses above 7.5% of adjusted gross income.
- Health insurance premiums while unemployed.
- Qualified birth or adoption expenses, up to $5,000 per child.
- Emergency personal expense, up to $1,000 per year (SECURE 2.0, effective 2024).
- Domestic-abuse victim distribution, up to the lesser of $10,000 (indexed) or 50% of the account (SECURE 2.0, effective 2024).
- Substantially equal periodic payments (SEPP) under IRC 72(t), an IRS levy, or a terminal-illness distribution.
One distinction matters: many exceptions waive only the 10% penalty, not the income tax. An exception such as unemployment health premiums removes the penalty on non-qualified earnings while those earnings stay taxable.
Decision table: is your Roth withdrawal taxed or penalized?
This table maps common combinations of age, 5-year status, and money type to the tax and penalty result under IRS Publication 590-B and Topic No. 558. Read your situation across the left column, then check whether the earnings face income tax, the 10% penalty, or both. Individual facts can change the outcome, and penalty exceptions may still apply.
| Your situation | Money withdrawn | Income tax? | 10% penalty? |
|---|---|---|---|
| Any age, any 5-year status | Regular contributions | No | No |
| Under 59½, account under 5 years | Earnings | Yes | Yes, unless an exception applies |
| Under 59½, account 5+ years | Earnings | Yes | Yes, unless an exception applies |
| 59½ or older, account under 5 years | Earnings | Yes | No (age 59½ exception) |
| 59½ or older, account 5+ years | Earnings (qualified) | No | No |
| Under 59½, first home (up to $10,000), account 5+ years | Earnings (qualified) | No | No |
A worked dollar example: withdrawing before 59½
Suppose you contributed $30,000 to a Roth IRA over several years, it grew to $40,000, you are 45 years old, and you withdraw $35,000. Under the ordering rule, the first $30,000 is your contributions and comes out tax-free and penalty-free (Source: IRS Publication 590-B). Only the remaining $5,000 reaches earnings.
Because you are under 59½, that $5,000 of earnings is includible in income and, absent an exception, is subject to the 10% additional tax, which equals $500. Had you withdrawn only $30,000, the entire amount would be contributions, so none of it would be taxed or penalized.
Roth conversions: a separate 5-year clock
Roth conversions run on their own 5-year clock, distinct from the contribution clock that governs qualified earnings. Each conversion has its own five-year period, and withdrawing converted principal before that period ends and before age 59½ can trigger the 10% tax on the converted amount (Source: IRS Publication 590-B). A conversion is taxable ordinary income in the year you do it, though it is not itself subject to the net investment income tax.
Consider a contrast. You made your first Roth contribution in 2020, so your contribution clock was satisfied by 2025. Separately, you converted $50,000 in 2024. If you are 50 and withdraw that $50,000 in 2026, the converted principal is only two years into its own clock, so the 10% tax can apply even though the account has existed since 2020. See the Q3 explainers on Roth conversion strategy, how much to convert to Roth, and the 2026 conversion deadline.
Key ages and why Roth IRAs have no lifetime RMDs
Age 59½ is the threshold at which the 10% early-distribution penalty stops applying (Source: IRS Topic No. 558). For traditional IRAs a second age matters, because required minimum distributions generally begin at age 73 (age 75 for those born in 1960 or later). Roth IRAs work differently for the original owner.
If you are the original owner of a Roth IRA, you are not required to take distributions during your lifetime, at any age; there are no lifetime RMDs (Source: IRS Publication 590-B). For traditional-account timing, see the Q3 page on required minimum distributions for 2026.
Inherited Roth IRA withdrawal rules
Inherited Roth IRAs follow post-death rules that differ from the original owner’s. For most non-spouse beneficiaries who inherited after 2019, the account must generally be emptied within 10 years of the owner’s death under the SECURE Act (Source: IRS Publication 590-B). Contributions and qualified earnings from an inherited Roth generally stay tax-free to the beneficiary, but the account cannot be held indefinitely.
Under the 2024 final regulations, beneficiaries of a Roth IRA generally do not owe annual distributions during the 10-year window, because a Roth owner is always treated as dying before the required beginning date; the balance simply must be gone by year 10. Eligible designated beneficiaries, such as a surviving spouse or a minor child of the owner, may follow different rules.
Tax forms for Roth IRA withdrawals
Three IRS forms handle Roth IRA withdrawals. Your custodian issues Form 1099-R to report any distribution taken during the year, and you use it when preparing your return (Source: IRS Publication 590-B). Form 5329 is where you calculate or claim an exception to the 10% additional tax on early distributions, and Form 8606 tracks your basis and reports non-qualified amounts.
2026 contribution limits and Roth income phase-outs
For context on the accounts these withdrawal rules govern, the 2026 IRA contribution limit is $7,500, up from $7,000 in 2025 (Source: IRS Notice 2025-67). The age-50 catch-up rises to $1,100, now cost-of-living indexed under SECURE 2.0, for a combined limit of $8,600 for those 50 and older.
Roth eligibility phases out by income. For 2026 the modified AGI phase-out is $153,000 to $168,000 for single and head-of-household filers, and $242,000 to $252,000 for married filing jointly (Source: IRS Notice 2025-67). Married filing separately while living with a spouse remains $0 to $10,000 and is not indexed.
Work with Q3 Advisors
Q3 Advisors is a registered investment adviser focused on retirement tax planning. This page is educational and is not advice; consult a qualified professional.
Frequently asked questions
Do you pay taxes on Roth IRA withdrawals?
You pay no tax on withdrawals of your own contributions, since those are already-taxed dollars (Source: IRS Publication 590-B). Earnings are tax-free only in a qualified distribution, meaning the account is 5+ tax years old and you are 59½ or older, or death, disability, or a first-home purchase applies. Non-qualified earnings are includible in income.
At what age can I withdraw from my Roth IRA without penalty?
Contributions can be withdrawn without penalty at any age (Source: IRS Publication 590-B). For earnings, age 59½ is when the 10% early-distribution penalty stops applying (Source: IRS Topic No. 558). To also avoid income tax on earnings, the account must be open at least five tax years.
What are the withdrawal rules for Roth IRA conversions?
Each Roth conversion carries its own 5-year clock, separate from the contribution clock (Source: IRS Publication 590-B). Withdrawing converted principal before that five-year period ends and before age 59½ can trigger the 10% tax on the converted amount. Under the ordering rule, converted dollars come out after contributions and before earnings, oldest conversion first.
What are the withdrawal rules for inherited Roth IRAs?
Most non-spouse beneficiaries who inherited after 2019 must generally empty the account within 10 years of the owner’s death (Source: IRS Publication 590-B). Under the 2024 final regulations, annual distributions are generally not required within that window for Roth beneficiaries, because a Roth owner is treated as dying before the required beginning date. Qualified earnings usually stay tax-free.
What is the Roth IRA 5-year rule and how does it work?
The 5-year rule sets the minimum holding period before Roth earnings can be qualified and tax-free. The clock generally starts on January 1 of the tax year for which you made your first Roth contribution (Source: IRS Publication 590-B). Conversions run on a separate five-year clock that governs the 10% tax on converted principal for those under 59½.
How do I avoid taxes on my Roth IRA withdrawal?
Earnings are tax-free only through a qualified distribution: the account open 5+ tax years and you 59½ or older, or meeting the death, disability, or first-home ($10,000 lifetime) conditions (Source: IRS Publication 590-B). Withdrawing only up to your total contributions is always tax-free, because those dollars were already taxed.
