Roth IRA withdrawal (tax witholding)
I understand that state taxation of Roth IRAs is voluntary, but are there specific IRS guidelines or rules that need to be followed when distributions are taken? Thanks.
I understand that state taxation of Roth IRAs is voluntary, but are there specific IRS guidelines or rules that need to be followed when distributions are taken? Thanks.
Permalink Submitted by Alan - IRA critic on Tue, 2015-06-02 17:38
I do not think any state taxes Roth distributions differently than federal rules, except that a couple states have a state early withdrawal penalty. Under IRS guidelines Roth distributions follow ordering rules. First money out are regular contributions, then conversions, and earnings come out last. This is the most tax friendly order for taxpayers.