may have access to withdrawals from a Roth IRA do not count as income on your tax return

If you withdraw money from a Roth IRA and meet the withdrawal rules, the IRS does not count that money as income. You do not report it on your federal tax return, and it does not affect your tax bracket or push you into a higher one. This is the main advantage of a Roth over a traditional IRA — you paid taxes on the money going in, so you pay nothing on the way out.

The catch is that "may have access to" has a specific meaning. You must be at least 59½ years old, and the account must have been open for at least five tax years. If you withdraw before meeting both conditions, part or all of your withdrawal counts as income and may trigger a 10% penalty on top of the tax bill.

Nonqualified withdrawals — money you take out before age 59½ or within five years of opening the account — are treated differently depending on what you are withdrawing. The earnings (investment gains) count as income. The contributions (money you put in) do not, because you already paid tax on those dollars.

Key Takeaways

  • may have access to Roth withdrawals at age 59½ or later, after a five-year holding period, are not reported as income and are not taxed.
  • Nonqualified withdrawals of your contributions are not taxed, but nonqualified withdrawals of earnings count as ordinary income and may trigger a 10% penalty.
  • The IRS uses a pro-rata rule if you have both traditional and Roth IRAs, which can make early Roth withdrawals more expensive than they appear.
  • Roth conversions from a traditional IRA are reported as income in the year you convert, even though you may not withdraw the money for decades.

How the five-year rule works

The five-year clock starts on January 1 of the tax year in which you open your first Roth IRA, not the day you fund it. If you opened a Roth in 2020, the five-year period ends on January 1, 2025, and you can take may have access to withdrawals starting that day — even if you only funded the account in December 2024.

The five-year rule applies to your entire Roth IRA history, not to each individual contribution. Once you have held a Roth for five years, all future may have access to withdrawals are tax-free, regardless of when you made each contribution. If you have multiple Roth accounts, they all share the same five-year clock based on when you opened your first Roth.

If you convert money from a traditional IRA to a Roth, that conversion starts its own five-year clock for the earnings portion. Contributions you convert are not subject to the five-year rule — only the earnings on those contributions are. This means you can convert a traditional IRA to a Roth, withdraw your contributions immediately tax-free, and wait five years before touching the earnings without penalty.

Nonqualified withdrawals and the pro-rata rule

If you withdraw from a Roth before age 59½ or before the five-year period ends, the IRS assumes you are withdrawing contributions first, then earnings. Contributions come out tax-free. Earnings count as ordinary income and are subject to a 10% early withdrawal penalty, unless an exception applies (disability, first-time home purchase up to $10,000 lifetime, or a few other narrow cases).

The pro-rata rule complicates this if you own both a Roth IRA and a traditional IRA, SEP IRA, or SIMPLE IRA. The IRS treats all your IRAs as one pool for withdrawal purposes. If you have $50,000 in a traditional IRA and $10,000 in a Roth, and you withdraw $10,000 from the Roth, the IRS calculates what percentage of your total IRA balance is pretax money. In this case, $50,000 out of $60,000 is pretax, so 83% of your $10,000 withdrawal is treated as coming from pretax money and counts as income.

This rule catches many people off guard. You cannot simply withdraw from the Roth and leave the traditional IRA untouched to avoid the pro-rata calculation. The IRS looks at your total IRA balance on December 31 of the year you withdraw, regardless of which account you actually took the money from.

Roth conversions and immediate tax reporting

When you convert money from a traditional IRA to a Roth, you report the converted amount as income on your tax return for that year. You owe tax on the conversion immediately, even though the money stays in the Roth and you may not touch it for decades. This is true whether you convert $1,000 or $100,000.

If the traditional IRA contained pretax contributions and earnings, the entire conversion is taxable. If it contained after-tax contributions (nondeductible contributions you made in previous years), only the earnings and pretax portion are taxable. You will need to file Form 8606 to track after-tax contributions and avoid double-taxing them.

The conversion itself does not trigger the 10% early withdrawal penalty, even if you are under 59½. However, if you withdraw the converted money within five years, the earnings portion is subject to the penalty. The contributions you converted can be withdrawn anytime without penalty.

How Roth withdrawals affect other benefits and deductions

Because may have access to Roth withdrawals are not counted as income, they do not affect your Modified Adjusted Gross Income (MAGI). This matters if you are on Medicare, because MAGI determines your Part B and Part D premiums. A large Roth withdrawal will not push you into a higher premium bracket the way a traditional IRA withdrawal would.

Nonqualified Roth withdrawals of earnings do count as income and will affect MAGI. This can increase your Medicare premiums, reduce your Social Security tax benefits, or affect your may be able to access for other income-based programs.

Roth withdrawals also do not count toward the income limits for deducting traditional IRA contributions or for making direct Roth contributions in future years. This is another reason some people use Roth conversions as a backdoor way to fund a Roth when their income is too high for direct contributions.

Reporting Roth withdrawals on your tax return

If your Roth withdrawal is may have access to, you do not report it anywhere on your federal tax return. You do not file Form 1099-R, and you do not list it on your 1040. The withdrawal is simply not part of your taxable income calculation.

If your withdrawal is nonqualified, your Roth IRA custodian will send you a Form 1099-R showing the gross amount withdrawn. You will need to report this on Form 8606 to calculate how much is taxable (the earnings portion) and how much is not (the contributions portion). The taxable amount goes on your 1040 as ordinary income.

If you owe the 10% early withdrawal penalty, you report it on Form 5329. The penalty is calculated on the taxable portion of your withdrawal and is added to your total tax bill.

State income tax and Roth withdrawals

Most states that have an income tax do not tax Roth withdrawals, following the federal rule. However, a few states have different rules. Pennsylvania, for example, does not tax retirement income at all, including Roth withdrawals. Other states may tax nonqualified Roth withdrawals of earnings differently than the federal government does.

If you live in a state with income tax and are taking a nonqualified Roth withdrawal, check your state's tax agency website or speak with a tax preparer about how your state treats the earnings portion. The federal tax treatment does not automatically apply at the state level.

Frequently Asked Questions

Does a Roth withdrawal affect my Social Security benefits?

may have access to Roth withdrawals do not count as income, so they do not affect your Social Security benefits. Nonqualified withdrawals of earnings do count as income and may trigger taxation of your Social Security benefits if your combined income exceeds certain thresholds. The threshold is $25,000 for single filers and $32,000 for married filing jointly.

Can I withdraw my Roth contributions anytime without penalty?

Yes. Contributions you made to a Roth IRA can be withdrawn at any age without penalty or tax, regardless of how long you have held the account. Only the earnings portion is subject to the age and five-year restrictions. This is why some people use Roth accounts as emergency savings — you can access your contributions if needed.

What happens if I withdraw from my Roth before five years but I am over 59½?

If you are over 59½, the five-year rule no longer applies. You can withdraw earnings tax-free and penalty-free. The five-year rule only matters if you are under 59½. Once you reach 59½, all your Roth withdrawals are may have access to as long as the account has been open for five years.

Do I have to report a Roth withdrawal to Social Security or Medicare?

You do not have to report it separately, but may have access to Roth withdrawals do not count as income for Medicare premium calculations. Nonqualified withdrawals of earnings do count as income and may increase your premiums. Medicare uses your tax return to determine your income, so if the withdrawal appears on your 1040, Medicare will see it.

If I convert a traditional IRA to a Roth, do I owe taxes that year?

Yes. You report the conversion as income on your tax return for the year you convert, and you owe tax on the amount converted (minus any after-tax contributions). You do not have to pay the tax from the converted money — you can pay it from other sources — but the tax bill is due when you file that year's return.