Ineligible Contribution to Roth removal
Are the earnings that come out of the Roth IRA as a result of removal of ineligible contributions subject to the 10% penalty if taxpayer is under 59 1/2? -m
Are the earnings that come out of the Roth IRA as a result of removal of ineligible contributions subject to the 10% penalty if taxpayer is under 59 1/2? -m
Permalink Submitted by Alan - IRA critic on Thu, 2024-04-18 21:48
Not anymore. Secure 2.0 ended the penalty for such corrective distributions done after 12/29/2022. Custodians should not be coding 1099R forms with the early distribution code for such removals, but if they don’t the taxpayer can claim the exception on Form 5329.