Tax-Deferred Earnings
While in the Roth IRA, earnings grow tax deferred.

Tax-Free Distributions
If withdrawn as part of a qualified distribution, the earnings are tax free.  For more information on qualified distributions, see “What is a Roth IRA qualified distribution?”

Saver’s Tax Credit:
You may be eligible to take a saver’s tax credit for your Roth IRA contribution. The maximum annual tax credit is $1,000 and, if you are eligible, the credit will reduce the federal income tax you owe dollar for dollar.  You may be eligible for the tax credit if you are age 18 or older, not a dependent of another taxpayer, and not a full-time student. Eligibility for the saver’s tax credit is also based on your tax filing status and your adjusted gross income. The applicable income limits are viewable on the News & Resources page.

Note:  Roth IRA contributions are not tax deductible.

Unlike Traditional IRAs, you cannot deduct contributions to a Roth IRA.  But, if you satisfy the requirements, distributions are tax free.  Also, contributions can be made to Roth IRAs after you reach age 70½ as long as you have earned income (or file a joint federal income tax return and your spouse has earned income).  Roth IRA contributions may also only be made if you have modified adjusted gross income (MAGI) within the allowable limits.  Roth IRA owners are never required to take distributions, so the assets may remain in the Roth IRA as long as the Roth IRA owner lives.