Roth rollover and 5-year rule

dlp

I have a traditional IRA that I wish to roll into a Roth. I have an existing Roth, but want to roll it over to a new Roth. Will that trigger a new 5-year withdrawal penalty or does it go by the date I made the original old Roth which is 10 years ago?

JulieO

Hi dip,

Thanks for the question.

For the conversion of the traditional IRA to a Roth IRA the 5 year rule for those particular funds starts over.

Each conversion has its own five-year period. For instance, if you converted your traditional IRA to a Roth IRA in 2023, the five-year period for those converted assets began on Jan. 1, 2023. If you later convert other traditional IRA assets to a Roth IRA in 2024, the five-year period for those assets began on Jan. 1, 2024.

Rollovers from one Roth IRA to another do not reset the five-year clock. If you roll over an amount from one Roth IRA to another Roth IRA, the 5-year period used to determine qualified distributions doesn’t change. The 5-year period begins with the first tax year for which the contribution was made
to the initial Roth IRA

https://www.irs.gov/pub/irs-pdf/p590a.pdf