- The payments are received, including lump sum distributions, on or after reaching the age of 59 1/2.
- The payments are paid to the estate or designated beneficiary of the participant because of the participant's death.
Distributions from an IRA, including a federal Roth IRA, are taxable to the extent the distribution exceeds your previously taxed contributions. Distributions you receive after retiring but before age 59 1/2 are taxable even if you receive substantially equal payments and you do not pay the federal penalty for an early withdrawal. Pennsylvania law does not have any exceptions similar to the federal exceptions for withdrawal before age 59 1/2. However, distributions from an IRA are not taxable if one or both of the following is true: