| Penalties and Taxes on Distributions from a Roth IRA |
| Qualified Reasons include: On or after age 59-1/2, death, disability and first time home purchase. |
| Other 72(t) exceptions include: Substatially equal periodic payments unreimbursed medical expenses that esceed 7.5 % of AGI, certain medical insurance premiums while unemployed and higher education expenses. |
| Distribution of.. | Roth IRA Distribution BEFORE 5 Years | Roth IRA Distributions AFTER 5 years |
| Contributions | Not subject to 10% penalty, not taxable | Not Subject to 10% penalty, not taxable |
| Converted amounts that are includible in income (Deductible contributions and earnings in the original IRA) | Before age 59-1/2 with no exception | 10% penalty not taxable | Before age 59-1/2 with no exception | No penalty, not taxable |
| Qualified Reasons | No Penalty, not taxable | Qualified Reasons | No penalty, not taxable |
| Other 72(t) exceptions | No Penalty, not taxable | Other 72(t) exceptions | No penalty, not taxable |
| Converted amounts that are not includible in income. (Non-deductible contributions in the original IRA) | Not subject to 10% penalty, not taxable | Not Subject to 10% penalty, not taxable |
| Earnings on the Roth IRA | Before age 59-1/2 with no exception | 10% penalty, earnings taxable | Before age 59-1/2 with no exception | 10% penalty, earnings taxable |
| Qualified Reasons | No Penalty, earnings taxable | Qualified Reasons | No penalty, earnings
not taxable |
| Other 72(t) exceptions | No Penalty, earnings taxable | Other 72(t) exceptions | No penalty, earnings
not taxable |
With the implementation of the IRS Restructuring and Reform Act of 1998, there are now very specific, but also favorable, rules for the order of distributions: