Roth IRA distributions are tax-free if you meet two conditions

A may have access to distribution from a Roth IRA comes out with no federal income tax owed. To may have access to, you must be at least 59½ years old (or meet an exception like disability or death), and your account must have been open for at least five tax years. If both conditions are met, you withdraw your contributions and earnings tax-free. If you take money out before meeting these rules, the earnings portion is taxable, though your contributions always come out tax-free.

The five-year rule is per account owner, not per account. If you opened your first Roth IRA in 2019, any Roth IRA you own in 2024 satisfies the five-year requirement — even if you opened it last month. The clock starts on January 1 of the year you made your first contribution to any Roth IRA.

The IRS does not require you to take distributions at any age, unlike traditional IRAs. You can leave the money untouched for your entire life, and your beneficiaries inherit it tax-free if you do.

Key Takeaways

  • Distributions are tax-free only if you are 59½ or older and your Roth IRA has been open for at least five tax years; otherwise, earnings are taxable.
  • Your contributions to a Roth IRA always come out tax-free, regardless of your age or how long you have owned the account.
  • The five-year rule applies to you as an account owner, not to each individual account, so opening a second Roth IRA does not restart the clock.
  • Roth IRAs have no required minimum distributions during your lifetime, so you can leave the money invested as long as you want.
  • If you withdraw earnings before 59½ and do not meet an exception, you owe income tax on the earnings plus a 10 percent early withdrawal penalty.

How the IRS treats contributions versus earnings

The IRS tracks contributions and earnings separately inside your Roth IRA. When you withdraw money, contributions come out first and are never taxed. Earnings come out after contributions are exhausted. This matters because it determines whether you owe tax on a withdrawal.

If your account has $50,000 in contributions and $15,000 in earnings, and you withdraw $30,000, the first $30,000 is treated as contributions and comes out tax-free. If you withdraw $60,000, the first $50,000 is contributions (tax-free) and the remaining $10,000 is earnings (taxable if you do not meet the may have access to distribution rules).

The IRS uses a pro-rata rule if you own multiple IRAs — both Roth and traditional. The rule treats all your IRAs as one pool for tax purposes. If you have a traditional IRA with pre-tax money and a Roth IRA, a withdrawal from the Roth is treated as coming proportionally from both accounts for tax calculation. This can create unexpected tax bills, so it matters whether you have other IRAs.

Early withdrawals and the 10 percent penalty

If you withdraw earnings before age 59½ and do not meet an exception, you owe federal income tax on the earnings at your ordinary tax rate, plus a 10 percent early withdrawal penalty. The penalty is calculated on the earnings amount only, not on the entire withdrawal.

Exceptions to the penalty exist for disability, death, first-time home purchase (up to $10,000 lifetime), and may have access to education expenses. If you meet an exception, the 10 percent penalty does not apply, but you still owe income tax on the earnings unless you are 59½ or older and the account is five years old.

Contributions can be withdrawn at any time without tax or penalty, even before age 59½. This is one of the main advantages of a Roth IRA — you have access to your own money without consequence. Only earnings are restricted.

Roth conversions and the pro-rata rule

If you converted money from a traditional IRA to a Roth IRA, the conversion amount is treated as a contribution for the five-year rule. However, the pro-rata rule applies to conversions. If you convert $20,000 from a traditional IRA that contains $80,000 in pre-tax money and $20,000 in after-tax contributions, the IRS treats the conversion as 80 percent pre-tax and 20 percent after-tax. You owe income tax on the pre-tax portion in the year of conversion.

Conversions have their own five-year holding period separate from your original Roth IRA contributions. If you converted in 2024 and withdraw the converted amount in 2025, you owe the 10 percent penalty on any earnings, even if your original Roth IRA is older than five years. The contribution itself (the amount you converted) can be withdrawn penalty-free after five years, but earnings on the conversion are restricted until age 59½.

State income tax on Roth distributions

Most states do not tax Roth IRA distributions, but a few do. Pennsylvania, New Jersey, and a handful of others tax retirement account distributions, including Roth IRAs, in certain situations. The rules vary by state and depend on your age, income, and the type of distribution.

If you live in a state with a retirement income tax, contact your state tax authority or a tax professional to understand how Roth distributions are treated. Federal tax rules do not automatically apply to state taxes.

Inherited Roth IRAs and beneficiary distributions

When you inherit a Roth IRA, the tax treatment depends on whether you are a spouse or non-spouse beneficiary. A spouse can treat the inherited Roth as their own, and the five-year rule applies from when the original owner opened their account. A non-spouse beneficiary must take distributions, but those distributions are tax-free if the original owner met the may have access to distribution rules.

If the original owner did not meet the five-year rule, non-spouse beneficiaries owe income tax on the earnings portion of distributions, even though the account is inherited. The 10 percent early withdrawal penalty does not apply to beneficiaries, regardless of age.

Frequently Asked Questions

Do I owe taxes if I withdraw only my contributions?

No. Your contributions to a Roth IRA are always tax-free to withdraw, at any age, at any time. The IRS treats contributions as money you already paid tax on (or did not need to pay tax on), so withdrawing them again is not taxable. Only earnings are subject to tax and penalties.

What happens if I withdraw earnings before 59½?

You owe federal income tax on the earnings at your ordinary tax rate, plus a 10 percent early withdrawal penalty on the earnings amount. If you meet an exception like disability or first-time home purchase, the penalty is waived but income tax still applies. Contributions can still be withdrawn without tax or penalty.

Does the five-year rule reset if I open a second Roth IRA?

No. The five-year rule is based on when you, as an account owner, first contributed to any Roth IRA. If you opened your first Roth in 2019 and open a second one in 2024, both accounts satisfy the five-year requirement immediately. The clock does not restart with a new account.

Can I withdraw my Roth conversion without penalty?

Conversions have their own five-year holding period. The amount you converted can be withdrawn penalty-free after five years from the conversion date, but earnings on the conversion are subject to the 10 percent penalty if you withdraw before 59½. Contributions to the original Roth follow the original five-year rule.

What if I have both a traditional IRA and a Roth IRA?

The pro-rata rule treats all your IRAs as one pool for tax purposes. If you withdraw from your Roth, the IRS calculates what percentage of your total IRA balance is pre-tax money and applies that percentage to the Roth withdrawal for tax calculation. This can create a tax bill even though you withdrew from a Roth. Consult a tax professional before withdrawing if you have both types of IRAs.