I am 52 years old and am permanently disabled with bipolar disease. and I will be on Social Security Disability Insurance (SSDI) for the rest of my life. Will I incur a 10 percent tax penalty if I withdraw $10,000 from my Roth IRA?
Qualified distributions or distributions that are a return of regular Roth IRA contributions are not taxable. So, the total contributions made originally will not be taxable.
A qualified distribution must meet both of the following requirements:
- The distribution meets the five-year holding period, which begins in the year of the first contribution.
- One of the following must be met:
- Roth owner has reached age 59 ½
- Roth owner is disabled
- Roth owner is deceased
- First-time home buyer exception
An individual is considered disabled if he can furnish proof that he cannot do any substantial gainful activity because of his physical or mental condition. A physician must determine that his condition can be expected to be of long, continued, and indefinite duration.
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Answered by: David S. Markle, CPA, is a CPA financial planner with Markle Wealth Management in Danielsville, Pa.