Nyce Ira Deposit Form (Page 2 of 2) in pdf

The following chart shows the differences between a traditional IRA and a Roth IRA:

Traditional IRA

Roth IRA

Maximum yearly

$5,500 ($6,500 if age 50 or older) for 2016

contribution

Are there income

Yes, if actively participating in an employer-spon-

Yes. Anyone with modified Adjusted Gross In-

limitations for

sored retirement plan (see chart on page 6)

come below $131,000 (single) or $193,000 (mar-

contributions?

ried filing jointly) may contribute to a Roth IRA.

Annual contribution deadline

Tax-filing deadline for the year. Contribution

must be received by the NYCE IRA Administrator

prior to the tax-filing deadline for the year.

Is there an age restriction on con-

Yes. You cannot make contributions beginning

tributions?

with the year you reach age 70½.

Tax Advantage

Federal Tax-Deferred Growth

Federal Tax-Free Growth

Are there required minimum distri-

Yes. Distributions must begin by the April 1

fol-

No. Distributions are not required during your

butions during my lifetime?

lowing the year you reach age 70½.

lifetime.

Is there federal income tax on

Yes, to the extent that a distribution represents

Not for Qualified Distributions. For non-Qualified

distributions?

deductible contributions and investment earn-

Distributions, only the earnings portion is taxable.

ings.

Is there a 10% penalty on early

Yes, the penalty applies to taxable distributions if

Yes, the penalty applies to the earnings portions

distributions?

you are under age 59½ and do not qualify for an

if you are under age 59½ and do not qualify for

exception.

an exception.

Do beneficiaries pay

Yes, to the extent that a distribution represents

Generally, no, as long as it is a Qualified Distri-

income tax on distributions after

deductible contributions and investment earn-

bution.

the IRA owner’s death?

ings.

All IRAs are tax deferred. That means you do not owe taxes on any earnings until you make a withdrawal. If you qualify, you may also be

able to deduct your contributions to a traditional IRA on your federal income tax return, deferring tax on that amount as well. Contribu-

tions to a Roth IRA are not tax deductible, however, a Qualified Distribution from a Roth IRA is income tax-free.

Nyce Ira Deposit Form Page 2

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