• The Roth IRA holder is at least age 59.5 when the distribution occurs.
• The distributed assets are used towards the purchase or rebuilding of a first home for the Roth IRA holder or a qualified family member. Qualified family members include the IRA owner's spouse, a child of the IRA owner and/or of the IRA owner's spouse, a grandchild of the IRA owner and/or of his or her spouse, a parent or other ancestor of the IRA owner and/or of his or her spouse. This is limited to $10,000 per lifetime.
• The distribution occurs after the Roth IRA holder becomes disabled.
• The assets are distributed to the beneficiary of the Roth IRA holder after the Roth IRA holder's death.

• a regular participant contribution.
• a Roth conversion of taxable Traditional IRA assets (i.e. Traditional IRA assets for which a tax deduction was allowed. These assets are taxed when converted to the Roth IRA).
• a Roth conversion of nontaxable Traditional IRA assets (i.e. Traditional IRA Assets for which there was no tax deduction. These assets are not subjected to income tax when distributed or converted to a Roth IRA).
• earnings on all Roth IRA assets.

1. regular Roth IRA participant contributions
2. taxable Traditional IRA conversions
3. nontaxable Traditional IRA conversion
4. earnings on all Roth IRA assets

• The distribution occurs on or after the Roth IRA owner reaches age 59.5.
  
  
• For un-reimbursed medical expenses - If the distribution is used to pay un-reimbursed medical expenses, the amount that exceeds 7.5% of the individual's adjusted gross income (AGI) for the year of the distribution will not be subjected to the early-distribution penalty. In other words, the amount paid for the un-reimbursed medical expenses minus 7.5% of the individual's adjusted gross income for the year of the distribution can be distributed penalty free.
  
  

  Example 1 Jack's AGI is $25,000, and he paid $4,000 for un-reimbursed medical expenses. The amount that exceeds 7.5% of his income = $4,000 - ($25,000 x 7.5%). The amount that exceeds 7.5% of his income = $4,000 - $1875. The amount that exceeds 7.5% of his income = $2,125. The maximum amount Jack may claim for the early-distribution exception is $2,125.

  
  
• To pay medical insurance - Individuals can make a penalty-free distribution to pay medical insurance for themselves, their spouses and dependents, providing the distribution occurs under the following four conditions:

1. The individual has lost his or her job.
2. The individual has received unemployment compensation paid under any federal or state law for 12 consecutive weeks.
3. The individual receives the distributions during either the year he or she receives the unemployment compensation or the following year.
4. The individual receives the distributions no later than 60 days after he or she has been re-employed.
   

• For a disability - If an individual becomes disabled before age 59.5 and makes a distribution from his or her Roth IRA because of the disability, the distributions are not subjected to the early-distribution penalty. Individuals are considered disabled if they furnish proof that a physical or mental condition inhibits them from engaging in substantial gainful activities. A physician must determine that this condition can be expected to result in death or to continue for an indefinite duration.
  
  
• As distributions to the Roth IRA beneficiary - If the Roth IRA owner dies before reaching age 59.5, the amounts distributed from the Roth IRA by the designated beneficiary are not subject to penalty.
  
  
• As part of an SEPP program - For penalty-free distributions that are part of a series of substantially equal payments over the life of the Roth IRA holder and or his or her beneficiary, the payments must last five years or until the Roth IRA owner reaches age 59.5 - whichever is longer - and the payments must also follow certain IRS-approved methods.
  
  
• For qualified higher-education expenses - Amounts are penalty free if they must go towards qualified higher-education expenses of the Roth IRA owner and/or his or her dependents. These qualified education expenses are tuition, fees, books, supplies and equipment required for the enrollment or attendance of a student at an eligible educational institution. An eligible educational institution is any college, university, vocational school, or other post secondary educational institution eligible to participate in the student aid programs administered by the Department of Education - these include virtually all accredited post secondary institutions, whether public, nonprofit, or proprietary (privately owned and profit-making). The educational institution should be able to indicate if it is an eligible educational institution.
  
  
• To purchase a first home - The Roth IRA owner can make penalty-free distributions to purchase, build or rebuild a first home:
  
  • for the Roth IRA owner.
  • for the Roth IRA owner's spouse.
  • for a child of the Roth IRA owner or of the Roth IRA owner's spouse.
  • for a grandchild of the Roth IRA owner or of the Roth IRA owner's spouse.
  • for a parent or other ancestor of the Roth IRA owner or of the Roth IRA owner's spouse.

The first-time homebuyer distribution must be used to pay qualified acquisition costs before the end of the 120th day after the Roth IRA owner receives the distributed assets.

The total distribution the Roth IRA owner uses for first-time home purchases cannot exceed $10,000 during the Roth IRA owner's lifetime. For married individuals, the $10,000 applies separately to each spouse, which means that the total for both is $20,000.

• For payment of Roth IRS levy - The IRS may levy against an IRA, resulting in a distribution. The distributed amount is subjected to income tax, but the early-distribution penalty is waived.

• If a Roth IRA holder completed multiple Roth conversions, the five-year period for each Roth conversion is determined separately for each conversion.
• For purposes of determining qualified distributions, there is only one five-year period. This never starts over.
• If an excess contribution is made to a Roth IRA and later removed, this contribution cannot be used to determine the five-year period for qualified distributions.