Contributions to a Roth IRA are not tax-deductible, nor are distributions of earnings from a Roth IRA taxable if the distribution is “qualified”.
- To be a “qualified distribution”, you must meet BOTH of the following constraints:
- You are age 59 ½ or older.
- You have had the Roth IRA account for at least 5 years.
- Non-qualified distributions of earnings are subject to ordinary income taxation and a 10% premature distribution penalty if the distribution occurs prior to age 59 ½.
- Withdrawal of your original contributions are never taxable no matter when they are withdrawn—nor are they subject to a 10% premature distribution penalty.