Traditional IRA Withdrawal Rules
Withdrawals before age 59½
Subject to ordinary income tax
An additional 10% early withdrawal penalty may apply unless an exception is met (such as first-time home purchase, qualified education expenses, disability, or birth/adoption expenses)
Taxes apply to the entire withdrawal amount, except for any non-deductible contributions
Withdrawals at age 59½ or above
No early withdrawal penalty
Withdrawal amount is taxed as ordinary income, except for any non-deductible contributions
Required minimum distributions (RMDs) from age 73
Starting at age 73, you must begin taking annual RMDs
Your first RMD must be taken by April 1 of the year after you turn 73
RMD amounts are calculated using IRS life expectancy tables
RMDs are taxed as ordinary income (except for non-deductible contributions)
Failure to take RMDs may result in IRS penalties
Tax Withholding
The federal tax withholding rate is set at 10% by default; state tax withholding varies
You can adjust your tax withholding rate within the app when you make a withdrawal
Roth IRA Withdrawal Rules
Qualified withdrawals from a Roth IRA are generally tax- and penalty-free, and there are no required minimum distributions (RMDs).
Withdrawals before age 59½
Withdrawals of your contributions are always tax- and penalty-free
If you withdraw earnings before age 59½ or within five years of opening the account, the earnings may be subject to taxes and a 10% early withdrawal penalty, unless you qualify for an exception (such as a first-time home purchase, qualified education expenses, disability, or birth/adoption expenses)
Withdrawals at age 59½ or above
Withdrawals are tax- and penalty-free if you are age 59½ or older and your account has been open for at least five years.
Tax Withholding
The federal tax withholding rate is set at 10% by default
You may opt out by setting your withholding rate to 0% in the app at the time of withdrawal
How do I make a withdrawal from my Crypto.com IRAs?
Follow these steps to make a withdrawal:
On the Crypto.com App home screen, tap IRAs from the main menu
Tap More > Withdraw from IRs
Enter the amount you want to withdraw
Enter the federal and state tax withholding details
Confirm your withdrawal
Can I select other qualified reasons when I make a withdrawal?
When you make a distribution with Crypto.com IRAs, the reason will be marked as either an early or normal distribution, depending on your age.
However, certain exceptions may allow for penalty-free IRA withdrawals (for example, first-time home purchase, education, or medical expenses).
Please consult your tax advisor to see if your situation qualifies and to understand any potential tax implications.
How is Required Minimum Distribution (RMD) Calculated?
The amount of RMD you need to take from your Traditional IRA starting from age 73 is calculated based on the life expectancy factor from the IRS's Uniform Lifetime Table, which can be found in IRS Publication 590-B.
You can calculate it by dividing your IRA account balance on December 31 of the previous year by the life expectancy factor for the age you turn that year. If you have more than one IRA account, you can calculate the RMD for each account and then withdraw the total from any combination of accounts.
If you already have an IRA account with us on December 31 of the previous year, you will receive a letter in January about the RMD amount you have to take.
What is the penalty of not taking Required Minimum Distribution (RMD)?
The deadline to take an RMD is on the 31 December. Failing to take it on time will result in a tax penalty of 25% of the amount not withdrawn.
If you have any questions, please contact our Customer Support team anytime on the Crypto.com App menu > Support > Contact Support. Our IRA Customer Support live chat team is there on Monday to Friday 8am - 6pm ET.