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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13323
Experience:  15years with H & R Block. Divisional leader, Instructor
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I converted a traditional 401K to a Roth 401K in October 2011.

Customer Question

I converted a traditional 401K to a Roth 401K in October 2011. I have significant medical expenses well in excess of the 7.5% ... If I withdraw funds from my Roth 401K today will I be required to pay a penalty or is the medical expenses a waiver for the 5 year rule?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.
Hello,If you can only withdraw the contribution amount in the ROTH, there would be no penalty. You do not include in your gross income qualified distributions or distributions that are a return of your regular contributions from your Roth IRA(s). If you need more and will withdraw any of the earnings, that will be taxable and the penalty would normally be applied.There is an exception though to the penalty on early withdrawal for medical. Early distributions that are not in excess of your unreimbursed medical expenses that are more than a certain percentage of your adjusted gross income.If you have unreimbursed medical expenses that are more than 10% (or 7.5% if you or your spouse was born before January 2, 1950) of your adjusted gross income for the year you would use form 5329 to claim the exception.
Expert:  Robin D. replied 1 year ago.
Please advise if you need clarification