There are tax implications that can impact taxpayers who approve the distribution of non-deductible IRA contributions.

Amounts withdrawn from Traditional IRAs containing both deductible and non-deductible contributions are includible in income using the same rules applicable for many pension plans. The non-deductible contributions are considered investment in the contract (i.e., basis). Pub 590-B includes a worksheet to determine the taxable portion of an IRA distribution, where non-deductible contributions have been made to the plan.