5 Year Aging Clock Starts?
A Roth IRA was opened in 2018, however funds was not added either by a direct contribution or (IRA) conversion to the Roth IRA. A zero balance existed.
Question is when does the 5 year aging clock starts for this Roth IRA; in the year that the Roth IRA was opened or when it was first funded? If it has to be funded to start the clock what is the minimum amount that needs to added, either by contribution or conversion.
Permalink Submitted by Alan - IRA critic on Sun, 2021-05-09 15:48
There is no dollar minimum, but the clock does not start until the year FOR which the Roth is funded with a legal contribution. For example, a 2018 regular contribution made for the prior year in 2019 starts the clock 1/1/2018. The legal contribution requirement means that the clock does not start with an excess contribution, for example if modified AGI is too high. Once the clock starts it does not stop even if the Roth is closed for a period and then contributed to again later on. A back door Roth contribution is funded by a conversion, and if a conversion starts the clock it is always for the year in which the conversion contribution is made.