- The payments are received, including lump sum distributions, on or after age 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 don't pay the federal penalty for an early withdrawal. Pennsylvania law doesn't have any exceptions similar to the federal exceptions for withdrawal before age 59 1/2. However, distributions from an IRA aren't taxable if one or both of the following is true: