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When can I withdraw the interest in my account without tax and penalties?

Any interest earnings distributed or withdrawn will be subject to federal income tax unless it is a “qualified distribution.” A distribution (withdrawal) is qualified if it’s made at least five years after the account owner’s first contribution to the Roth IRA (counting from January 1 of the year of the first contribution), and the distribution is made:

  • After the owner is age 59½;
  • For a qualified first-time home purchase (up to $10,000 lifetime limit);
  • After the owner is disabled; or
  • To a beneficiary after the owner’s death or disability.

If a distribution isn’t qualified, any earnings in the Roth IRA are subject to federal income tax. In addition to any federal income tax that would apply, if the owner is under age 59½, a 10% additional income tax on any earnings will apply unless an exception is available, including exceptions for withdrawals:

  • Due to disability or after death;
  • Paid at least annually in equal or close to equal amounts over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary);
  • For qualified higher education expenses;
  • For health insurance premiums after the owner has received unemployment compensation for 12 consecutive weeks;
  • For a qualified first-time home purchase (up to $10,000 lifetime limit);
  • Made directly to the government to satisfy a federal tax levy;
  • Up to the amount of deductible medical expenses; or
  • That constitute a qualified reservist distribution, for a member of a reserve component called to duty for more than 179 days.

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