Five-Year Roth IRA Rule

Forum|Forum|1 year ago
January 2, 2025
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I am fairly sure I opened a Roth IRA quite a few years ago, but I can't recall which institution it was at, and I don't even remember if I funded that IRA at the time, but I think I did. I am over 59 1/2 years old, and I am thinking of funding a new Roth IRA I have set-up last year. Does the IRS have archival records of Roth IRA's set-up in prior years? I want to transfer funds from a rollover IRA account to the new Roth IRA account, but only if it is not subject to the Five-Year rule.

Not A Product Question

Opus 17

Employee

The IRS may have records going back up to 10 years, in the form of forms 5498 showing contributions, if you made any. You can try checking your transcript here.

https://www.irs.gov/individuals/get-transcript

However, the burden of proof is on you to show that you are entitled to any tax break. If you open a Roth IRA now, and then make withdrawals of earnings in less than 5 years, it will be up to you to prove (if audited) that you had a previous Roth IRA.

But remember that the 5 year rule only applies to withdrawal of earnings. You can always withdraw your contributions tax-free, and contributions are always withdrawn first. Conversions from a traditional IRA are subject to a different 5 year rule, but that does not apply over age 59-1/2. If you convert from a traditional IRA, that is taxable when the conversion happens, and then withdrawals of the conversion amounts will be tax-free and not subject to any penalties no matter when it occurs. Earnings are withdrawn last, and could be subject to regular income tax if you can't prove you meet the 5 year rule.