Am I subject to IRA interest tax on the interest my IRA earns, or am I only subject to IRA interest tax if I take an IRA distribution?

You aren’t subject to IRA interest tax on the interest your IRA earns while it remains in your account. Instead, you’ll be responsible for any IRA interest tax when you take distributions from the traditional IRA.

If you have Roth IRA distributions, they’re tax-free if both of these are true:

• You held the account for five years.
• You take the distribution for one of these reasons:
  • Over age 59 1/2
  • Death or disability
  • Using the distribution as a qualified first-time homebuyer (up to a $10,000 lifetime limit)