The Internal Revenue Service (IRS) requires a waiting period of 5 years before withdrawing balances converted from a traditional IRA to a Roth IRA, or you may pay a 10% early withdrawal penalty on the conversion amount in addition to the income taxes you pay in the tax year of your conversion. There are a variety of exemptions to this penalty, however, including death, disability, and turning age 59½. Also note that the 5-year waiting rule does not apply to the amount originally converted; it only applies to the earnings portion of the converted amount.
Keep in mind that Roth conversions can only be attributed to the year in which they take place (not tied to the filing deadline like contributions). If you convert at any time in 2024, the 5-year rule starts in January 2024, but you cannot convert in 2025 and attribute it to 2024.
Important to know: The 5-year rule is counted separately for each conversion. The same rules apply to so-called backdoor Roth IRAs.
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