Early Distribution of Roth Contributions
Hello,
Say someone had a 401(k) that had a portion designated as Roth contributions.
They left the job so they moved the 401(k) into an IRA and the Roth portion into a Roth IRA.
If they are under 59.5, are they allowed to take a tax free and penalty free distribution of the contribution portion of the Roth? Not the earnings.
Thank you!
Permalink Submitted by Alan - IRA critic on Thu, 2024-04-18 21:40
Yes. The amount of Roth 401k contributions will show in Box 5 of the direct rollover 1099R, and that amount will be treated as regular Roth IRA contributions once in the Roth IRA that can be withdrawn any time without tax or penalty. The earnings will be subject to tax until the Roth IRA is qualified, and also to the penalty until age 59.5.