Page 93 - 2020 Publication 17

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Income. You must include in your gross in- only be made to another designated Roth ac- tion from a Roth IRA, you may have to pay the
come distributions from a qualified retirement count or to a Roth IRA. For more information 10% additional tax on early distributions. You
plan that you would have had to include in in- about designated Roth accounts, see Designa- must generally pay the 10% additional tax on
come if you hadn't rolled them over into a Roth ted Roth accounts under Rollovers in Pub. 575. any amount attributable to the part of the
IRA. You don't include in gross income any part amount converted or rolled over (the conversion
of a distribution from a qualified retirement plan Are Distributions Taxable? or rollover contribution) that you had to include
that is a return of basis (after-tax contributions) in income. A separate 5-year period applies to
to the plan that were taxable to you when paid. You don't include in your gross income qualified each conversion and rollover. See Ordering
These amounts are normally included in income distributions or distributions that are a return of rules for distributions, later, to determine the
on your return for the year of the rollover from your regular contributions from your Roth amount, if any, of the distribution that is attribut-
the qualified employer plan to a Roth IRA. IRA(s). You also don't include distributions from able to the part of the conversion or rollover
If you must include any amount in your your Roth IRA that you roll over tax free into an- contribution that you had to include in income.
! gross income, you may have to in- other Roth IRA. You may have to include part of Additional tax on other early distributions.
CAUTION crease your withholding or make esti- other distributions in your income. See Ordering Unless an exception applies, you must pay the
mated tax payments. See Pub. 505, Tax With- rules for distributions, later. 10% additional tax on the taxable part of any
holding and Estimated Tax. What are qualified distributions? A qualified distributions that aren't qualified distributions.
For more information, see Rollover From distribution is any payment or distribution from See Pub. 590-B for more information.
Employer's Plan Into a Roth IRA in chapter 2 of your Roth IRA that meets the following require- Ordering rules for distributions. If you re-
Pub. 590-A. ments. ceive a distribution from your Roth IRA that isn't
Converting from a SIMPLE IRA. Generally, 1. It is made after the 5-year period begin- a qualified distribution, part of it may be taxable.
you can convert an amount in your SIMPLE IRA ning with the first tax year for which a con- There is a set order in which contributions (in-
to a Roth IRA under the same rules explained tribution was made to a Roth IRA set up cluding conversion contributions and rollover
earlier under Converting From Any Traditional for your benefit. contributions from qualified retirement plans)
IRA to a Roth IRA under Traditional IRAs. 2. The payment or distribution is: and earnings are considered to be distributed
However, you can't convert any amount dis- from your Roth IRA. Regular contributions are
distributed first. See Ordering Rules for Distri-
tributed from the SIMPLE IRA during the 2-year a. Made on or after the date you reach butions under Are Distributions Taxable? in
period beginning on the date you first participa- age 59 1 /2, chapter 2 of Pub. 590-B for more information.
ted in any SIMPLE IRA plan maintained by your b. Made because you are disabled,
employer. Must you withdraw or use Roth IRA assets?
More information. For more detailed informa- c. Made to a beneficiary or to your es- You aren't required to take distributions from
tate after your death, or
your Roth IRA at any age. The minimum distri-
tion on conversions, see Can You Move bution rules that apply to traditional IRAs don't
Amounts Into a Roth IRA? in chapter 2 in Pub. d. To pay up to $10,000 (lifetime limit) of apply to Roth IRAs while the owner is alive.
590-A. certain qualified first-time homebuyer However, after the death of a Roth IRA owner,
amounts. See First home under What certain minimum distribution rules that apply to
Rollover From a Roth IRA Acts Result in Penalties or Additional traditional IRAs also apply to Roth IRAs.
Taxes? in chapter 1 of Pub. 590-B for
You can withdraw, tax free, all or part of the as- more information. More information. For more detailed informa-
sets from one Roth IRA if you contribute them tion on Roth IRAs, see chapter 2 of Pub. 590-A
within 60 days to another Roth IRA. Most of the Additional tax on distributions of conver- and Pub. 590-B.
sion and certain rollover contributions
rules for rollovers, explained earlier under Roll-
over From One IRA Into Another under Tradi- within 5-year period. If, within the 5-year pe-
riod starting with the first day of your tax year in
tional IRAs, apply to these rollovers. which you convert an amount from a traditional
Rollover from designated Roth account. A IRA or roll over an amount from a qualified re-
rollover from a designated Roth account can tirement plan to a Roth IRA, you take a distribu-

Chapter 9 Individual Retirement Arrangements (IRAs) Page 89