By Jeremy T. Rodriguez, JD
IRA Analyst


Ed, I have converted a traditional IRA to a Roth this year, also have another Roth opened 10 years ago. Does IRS consider the converted Roth as being opened 10 years ago as far as earnings go? Can  I combine the two accounts? Thanks. Bill



When it comes to qualified distributions of earnings, the five-year period begins with your first contribution to a Roth IRA. It does not restart with subsequent contributions or conversions. Because your first Roth IRA was opened 10 years ago you have satisfied this five-year holding period on all your Roth IRA funds for qualified distributions of earnings.

Be careful not to confuse the five-year rule for qualified distributions of earnings with the five-year rule for penalty-free distributions of converted funds. For penalty-free distributions of converted funds for those under age 59 1/2, there is a different five-year rule. Each conversion has its own special 5-year timeclock. That’s why you should keep track of the amount that was converted.

There’s no problem with combining the accounts. The IRS had previously recommended keeping conversions in a separate IRA, but the aggregation rules and ordering rules for Roth IRA distributions renders this unnecessary.


Has the law changed relative to one-time QHFD funding using IRA funds for 2018?  Do you think it also will survive into 2019? I understand that the HSA contribution limit for those of us 55+ in age will be $7000 plus a $1000 ‘catch-up” amount.  I have recently retired and have several IRA trust accounts.  I would like to use $8,000 in funds from one of these accounts towards my HSA ($7900 if I fund it within 2018 tax year).  Is this doable, and is that contribution (from my IRA) tax deductible?

Thanks in advance!




There have been no legislative changes to the Qualified HSA funding distribution rules and while no one can predict the future, there don’t appear to be any significant changes to these rules on the horizon. However, given your circumstances, you may want to think carefully about doing a QHFD.

While you have the 2018 limits correct ($6,900 family coverage plus $1,000 catch-up), you need to consider the QHFD 12-month testing rule. This rule requires someone executing a QDFD to remain eligible for HSA coverage for a full 12-month period following that transfer. This means you must continue to be enrolled in a High Deductible Health Plan (“HDHP”). Failure to do so will cause the amount deposited into the HSA to be taxable and subject to the 10% early distribution penalty.

I raise this point because retirees generally do not participate in HDHPs. If you no longer have that type of coverage, you cannot do the QHFD.