Roth Ira withdrawal

Forum|Forum|5 years ago
May 10, 2021
2 replies
12 views

Taxpayer opened a Roth Ira account in 2014 with an initial contribution of $5,500.00; In 2020, taxpayer withdrew his contribution and received a gross distribution of $8,596.00. Taxpayer turn 55 years at the time of withdrawal. Is he only liable for his earning of $3,096.00?

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Best answer by TaxGuyBill

Yes, there is only tax and penalty on the earnings. The withdrawal of the original contribution (Basis) is always tax-free and penalty-free.

T

TaxGuyBillAnswer

Level 15

Yes, there is only tax and penalty on the earnings. The withdrawal of the original contribution (Basis) is always tax-free and penalty-free.

qbteachmt

Level 15

Have you read the instructions for Form 8915-E? It sure would be a shame to pay the early withdrawal penalty on this in a year where that requirement can be waived, if it qualifies.

https://www.irs.gov/newsroom/coronavirus-relief-for-retirement-plans-and-iras

https://www.irs.gov/pub/irs-pdf/i8915e.pdf

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