Roth IRA withdrawal rules and the 5-year rule: what comes out tax free

Key points

• Your own Roth IRA contributions can come out at any time, at any age, with no income tax and no 10% penalty. The tax code treats every withdrawal as coming from contributions first.
• The Roth IRA 5-year rule: earnings come out tax free only once 5 tax years have passed since January 1 of the first year you contributed for (or converted or rolled in Roth 401(k) money, if earlier), and the withdrawal is made at 59 and a half or older, because you are disabled, for a first home (up to $10,000) or to your beneficiary after your death.
• A second 5-year rule runs for each conversion. That clock decides only whether converted money taken out before 59 and a half owes the 10% additional tax. Converted money is never taxed again.
• After your contributions come your conversions, oldest first, then earnings. Form 8606 does the sum on your tax return.

A Roth IRA holds money that has already been taxed. The rules decide which dollars come out first and when the growth on them becomes tax free. Our guide to retirement account withdrawals covers every kind of account; this one covers Roth IRAs only.

These are federal rules, not state income tax. We checked every rule and figure against the tax code, Treasury regulations and IRS publications on October 29, 2026 (sources at the end).

How do Roth IRA withdrawals work?

The tax code splits every Roth IRA withdrawal into layers and takes them in a fixed order. Section 408A(d)(4) treats a withdrawal as made from contributions first, “to the extent that the amount of such distribution, when added to all previous distributions from the Roth IRA, does not exceed the aggregate contributions to the Roth IRA”. The Treasury regulation spells out the order:

Order	Layer	Income tax	10% additional tax before 59 and a half
1	Regular contributions	Never	Never
2	Conversions, oldest year first	Never (any tax was due the year you converted)	Only within 5 years of that conversion, on the part that was taxed
3	Earnings	Yes, unless the withdrawal is qualified	Yes, unless qualified or an exception applies

Within each conversion, the part that was taxed when you converted comes out before any part that was not.

Three counting rules make the layers work:

• All your Roth IRAs count as one. Every withdrawal you make from any of them in a year is added together, and so are your contributions.
• The order is settled at the end of the year, not withdrawal by withdrawal.
• Contributions for a year include ones made early the next year for that year, by the tax filing deadline (not counting extensions).

Roth IRAs are kept apart from traditional IRAs: the tax code applies the IRA basis rules “separately with respect to Roth IRAs and other individual retirement plans”, so traditional IRA balances play no part. Traditional IRAs follow different withdrawal rules.

What is a qualified Roth IRA distribution?

A qualified distribution comes out tax free, earnings included, and owes no 10% additional tax. It needs two things. First, it is made after the 5-year period that “begins on the first day of the individual’s taxable year for which the first regular contribution is made to any Roth IRA of the individual” or, if earlier, the year of the first conversion or Roth 401(k) rollover. Second, it is made:

• on or after the date you reach age 59 and a half,
• because you are disabled (unable to do any substantial gainful activity because of a condition expected to last indefinitely or end in death),
• to your beneficiary or your estate after your death, or
• for a first home, up to a $10,000 lifetime limit.

What counts is the date, not the year: in an IRS example, someone born on August 15, 1968 reaches 59 and a half on February 15, 2028.

If a withdrawal is not qualified, you still get your contributions and your conversions back first. Only the earnings layer can be taxed, and only if the withdrawal reaches it.

The Roth IRA 5-year rule for earnings: one clock for the account

This clock decides whether earnings can come out tax free. How it runs:

• It starts on January 1 of the first year you contributed for. A first contribution made in March 2023 for 2022 starts the clock on January 1, 2022.
• A first conversion or Roth 401(k) rollover can start it too. The clock starts with whichever came first: the year of your first regular contribution, your first conversion, or your first rollover from a Roth 401(k) into a Roth IRA. Years in the 401(k) do not count.
• You have only one. The regulation says “each Roth IRA owner has only one 5-taxable-year period” for all their Roth IRAs. Opening a second Roth IRA later does not start a new clock.
• It ends on December 31 of the fifth year. A clock that started on January 1, 2022 ends on December 31, 2026, so from January 1, 2027 withdrawals can be qualified.

The 5-year rule for conversions: one clock for each conversion

A conversion moves money from a traditional IRA into a Roth IRA, and you pay income tax that year on the pre-tax part. A rollover of pre-tax money from a 401(k) or similar plan straight into a Roth IRA is treated the same way. Each conversion then has its own 5-year clock, which decides only whether the 10% additional tax applies when converted money comes out before 59 and a half.

The regulation applies the 10% to a withdrawal “to the extent it is allocable to a conversion contribution, if the distribution is made within the 5-taxable-year period beginning with the first day of the individual’s taxable year in which the conversion contribution was made.” Only the part of the conversion that you paid income tax on counts. The money is not taxed again; the 10% is the only cost.

	The account clock	Each conversion’s clock
What it decides	Whether earnings are tax free	Whether the 10% applies to converted money
How many	One for all your Roth IRAs	One per conversion
Starts	January 1 of the first year you contributed for, converted or rolled in Roth 401(k) money	January 1 of the year of that conversion
Matters after 59 and a half	Yes	No

The two clocks can start in different years for the same day’s work. IRS Publication 590-B gives the example of a conversion made on February 25, 2025, together with a regular contribution for 2024 made the same day: “the 5-year period for the conversion begins January 1, 2025, while the 5-year period for the regular contribution begins on January 1, 2024.”

After 59 and a half, conversion clocks stop mattering, and the other exceptions listed next also cover converted money. The tax on a conversion itself is a separate question; our Roth conversion calculator estimates it.

The Roth IRA withdrawal penalty: when the 10% applies

Before 59 and a half, the 10% additional tax can apply to two layers, never to contributions:

• converted money withdrawn within 5 years of that conversion, on the part that was taxed when converted, and
• earnings in a withdrawal that is not qualified.

Publication 590-B lists the exceptions that remove it from a Roth IRA withdrawal: reaching 59 and a half, disability, a certified terminal illness, being a beneficiary, a first home, a series of substantially equal payments (our 72(t) guide explains them), unreimbursed medical expenses over 7.5% of adjusted gross income, health insurance premiums while unemployed, corrective distributions, higher education expenses, an IRS levy, qualified reservist, birth or adoption, disaster recovery, domestic abuse victim and emergency personal expense distributions. Each has its own conditions and limits; our guide to the early withdrawal penalty covers them.

An exception removes only the 10%. Taxable earnings stay taxable. From a Roth SIMPLE IRA, the additional tax is 25% during your first 2 years in the employer’s SIMPLE plan. The rule of 55 is not on the list: it covers workplace plans, not IRAs.

Using a Roth IRA for a first home

Up to $10,000 of Roth IRA withdrawals in your lifetime can go toward a first home. If your account clock has run, that money is a qualified distribution: tax free, earnings included. If the clock has not run, the earnings in it are still taxed, but the 10% additional tax does not apply to them.

The conditions, from section 72(t)(8) and Publication 590-B:

• Who: the home can be for you, your spouse, or a child, grandchild, parent or other ancestor of you or your spouse.
• First-time homebuyer: the buyer had no ownership interest in a main home in the 2 years ending on the date of acquisition (the date a binding contract is signed or building starts). A married buyer’s spouse must meet the same test.
• Timing: the money must pay “qualified acquisition costs” (buying, building or rebuilding, plus usual settlement, financing and closing costs) within 120 days of the withdrawal.
• Limit: $10,000 per person for life, counting earlier first-home withdrawals from any IRA. If both spouses are first-time homebuyers, each can take up to $10,000.
• If the purchase falls through: the money can generally go back into an IRA within 120 days of the withdrawal, treated as a rollover.

Roth IRA withdrawal examples, worked the IRS way

Each example follows IRS Form 8606, Part III (2025 form), which applies the same order: withdrawals in, minus contributions (line 22), minus conversions (line 24), equals taxable earnings (line 25c). Tax figures use the 2026 federal brackets and standard deduction for a single filer, assuming deductions stay the same.

The account for Examples 1 to 3. You were born in 1974 and are 52 in 2026. Your Roth IRA holds $100,000: $45,000 of regular contributions, a $20,000 conversion made in 2022, a $10,000 conversion made in 2025 (both conversions were fully taxed when you converted) and $25,000 of earnings. You take one withdrawal in 2026.

Withdrawal in 2026	Comes from	Taxable earnings	10% on converted money	10% on earnings
$45,000	Contributions only	$0	$0	$0
$72,000	$45,000 contributions, $20,000 (2022 conversion), $7,000 (2025 conversion)	$0	$2,700	$0
$100,000	Everything	$25,000	$3,000	$2,500

Example 1: contributions only. $45,000 comes out with no tax and no 10%, at 52. Form 8606: line 19 $45,000, line 22 $45,000, line 23 $0, so nothing is taxable.

Example 2: into the conversions. $72,000 uses up the contributions and reaches $27,000 of conversions. None of it is taxed again, but both conversions are inside their clocks in 2026: the 2022 clock runs to December 31, 2026, the 2025 clock to December 31, 2029. The 10% applies to $27,000: $2,700. Taken in January 2027 instead, the 2022 conversion is outside its clock and the 10% falls to $700, on the $7,000 from 2025. The difference is $2,000.

Example 3: everything out. $100,000 reaches the earnings. Form 8606: line 19 $100,000, line 22 $45,000, line 23 $55,000, line 24 $30,000, line 25c $25,000 taxable. With $70,000 of other income, the $25,000 adds $5,500 of federal income tax (22% bracket). The 10% adds $2,500 on the earnings and $3,000 on the converted money. Income tax and the 10% together: $11,000. Our 401(k) withdrawal calculator also works for IRAs but treats every dollar as taxable, so enter only the taxable earnings: Example 3’s earnings in the calculator show the $5,500 and the $2,500. Add the $3,000 yourself, and skip its withholding line: it assumes pre-tax money, and the IRS tells custodians, “Generally, Roth IRA distributions are not subject to withholding”.

Example 4: over 59 and a half, but the account clock has not run. You were born in 1963 and are 63 in 2026. Your first Roth IRA contribution, $7,000 for 2023, was made in early 2024. You converted $13,000 in 2024. The account has grown by $6,000, to $26,000, and you take it all in 2026. The clock started on January 1, 2023 and ends on December 31, 2027, so the withdrawal is not qualified. The $7,000 and the $13,000 come back tax free. The $6,000 of earnings is taxable, with no 10% because you are over 59 and a half. With $50,000 of other income that adds $720 of income tax (12% bracket): enter only the $6,000 of earnings in the calculator. Taken on or after January 1, 2028, the whole $26,000 would be tax free.

Example 5: a first home. You were born in 1971 and are 55 in 2026. Your Roth IRA has been open since 2012, with $8,000 of contributions and $32,000 of earnings, and no conversions. You take $25,000 to help your daughter, a first-time buyer, with her home. Form 8606: line 19 $25,000, line 20 $10,000 (the first-home amount), line 21 $15,000, line 22 $8,000, line 23 $7,000, line 25c $7,000 taxable. That $7,000 owes income tax and the 10%, because the $10,000 first-home limit is used up: with $70,000 of other income, $1,540 of income tax and $700 of additional tax (enter only the $7,000 of taxable earnings in the calculator to see both). A withdrawal of $18,000 would have been tax free: $8,000 of contributions plus the $10,000 first-home amount.

How Roth IRA withdrawals are reported

• Form 1099-R from your IRA custodian. Box 7 code Q means the custodian knows the withdrawal is qualified. Code T means you are 59 and a half or older, disabled or a beneficiary, but the custodian does not know whether the 5-year period has been met. Code J means an early distribution with no known exception.
• Form 8606, Part III works out the taxable part of a withdrawal that is not qualified, as in the examples. You keep track of your contributions and conversions; the 2025 instructions point to your earlier Forms 8606 for the conversion amounts.
• Form 5329, line 1 takes the taxable earnings plus any converted money withdrawn inside its 5-year clock, for the 10%. Publication 590-B’s Recapture Amount Allocation Chart (Appendix C) does the split. Exceptions go on line 2. A first-home amount from Form 8606 line 20 goes on both lines (exception 09).

Line numbers are from the 2025 forms. Check them for the year you file.

Inherited Roth IRAs, Roth 401(k)s and RMDs

• Inherited Roth IRAs follow their own deadlines and options. Our guide to inherited Roth IRA distribution rules covers them.
• Roth 401(k)s do not use the contributions-first order, and their 5-year clock is set by each plan. See our Roth 401(k) withdrawal rules.
• No RMDs. You never have to take money out of your own Roth IRA. Our guide to Roth accounts and RMDs explains why.

Common Roth IRA withdrawal mistakes

1. Thinking a new Roth IRA restarts the 5-year rule. There is one account clock for all your Roth IRAs, set by your first contribution, conversion or Roth 401(k) rollover.
2. Dating a conversion’s clock from the prior year. Only regular contributions can be made for the previous year. A conversion’s clock starts on January 1 of the year you convert.
3. Assuming 59 and a half makes everything tax free. Earnings also need the account clock (Example 4).
4. Treating converted money as taxable again. It is never taxed a second time; inside its clock and before 59 and a half, it owes only the 10%.

About this guide

Written by the Diversify Guy editorial desk. Diversify Guy is a pen name. It is the byline of our editorial team, not a single individual. We do not publish personal trading records or claim to be your adviser. We tell you where every figure came from so you can check it yourself. How we work and how we get paid.

This guide explains federal rules. It is not personalized tax or investment advice.

Sources and check dates

All sources were fetched and checked on October 29, 2026.

• Internal Revenue Code section 408A (Roth IRAs), including (d)(2), (d)(3)(F), (d)(4) and (d)(5), U.S. Code 2024 edition: https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapD-partI-subpartA-sec408A.htm
• Internal Revenue Code section 72(t) (10% additional tax, the 25% SIMPLE IRA rate, exceptions, first-time homebuyer rules) and 72(m)(7) (disability), U.S. Code 2024 edition: https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapB-partII-sec72.htm
• 26 CFR 1.408A-6 (Roth IRA distributions, the 5-year periods and the ordering rules), eCFR, title 26 up to date as of October 27, 2026: https://www.ecfr.gov/current/title-26/section-1.408A-6
• 26 CFR 1.408A-10 A-4 (a Roth 401(k) rollover and the Roth IRA 5-year period): https://www.ecfr.gov/current/title-26/section-1.408A-10
• 26 CFR 1.408A-3 A-2 (regular contributions due by the return due date, not including extensions): https://www.ecfr.gov/current/title-26/section-1.408A-3
• 26 CFR 1.402A-1 (designated Roth accounts: the per-plan 5-year period and pro rata taxation), cited for the Roth 401(k) comparison: https://www.ecfr.gov/current/title-26/section-1.402A-1
• IRS Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs), chapters 1 and 2, page last updated April 30, 2026: https://www.irs.gov/publications/p590b
• IRS Form 8606 (2025), Nondeductible IRAs, Part III: https://www.irs.gov/pub/irs-pdf/f8606.pdf
• IRS Instructions for Form 8606 (2025), Part III and the Roth SIMPLE IRA rate (line 23), page last updated April 30, 2026: https://www.irs.gov/instructions/i8606
• IRS Instructions for Form 5329 (2025), line 1, page last updated April 30, 2026: https://www.irs.gov/instructions/i5329
• IRS Instructions for Forms 1099-R and 5498 (2026), distribution codes J, Q and T and withholding on Roth IRA distributions, page last updated June 23, 2026: https://www.irs.gov/instructions/i1099r
• IRS, Retirement topics: Exceptions to tax on early distributions, page last updated December 11, 2025: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions
• IRS, Substantially equal periodic payments (the age 59 and a half date example, Q&A 13), page last updated July 23, 2026: https://www.irs.gov/retirement-plans/substantially-equal-periodic-payments
• Rev. Proc. 2025-32 (2026 tax brackets and standard deduction): https://www.irs.gov/pub/irs-drop/rp-25-32.pdf