Non-Qualified Distribution

What Does Non-Qualified Distribution Mean?
1) A distribution from a Roth IRA that occurs before the Roth IRA owner meets certain requirements (see definition for qualified distributions).

2) A distribution from an education savings account that exceeds the amount used for qualified education expenses.

Investopedia explains Non-Qualified Distribution
Typically, when a distribution is non-qualified, the amount attributable to earnings will be subject to income tax and an early-distribution penalty of 10%.

Related Terms

In-Service Withdrawal
Individual Retirement Account - IRA
IRA Adoption Agreement and Plan Document
IRA Conversion
Ordering Rules
Qualified Distribution
Recharacterization
Reconversion
Required Minimum Distribution
Roth IRA
Spousal IRA
Triggering Event
More Related Terms

Related Links

Tax Relief For Katrina Victims - Find out if you qualify for the assistance offered to hurricane survivors by the U.S. government.
Tax Treatment Of Roth IRA Distributions - Learn the requirements for withdrawing funds tax and penalty free.
Taking Penalty-Free Withdrawals From Your IRA - If you need to take early distributions, learn under which circumstances you won't suffer expensive consequences.
A Closer Look At The Roth 401(k) - Learn about the benefits and drawbacks of this new investment account and see if it's right for you.
Special Feature: Individual Retirement Accounts (IRAs) - If planning for your retirement has you confused, you''re not alone! Our IRA feature is your one-stop shop for everything you need to know about IRAs.
What are the tax consequences of a Roth IRA distribution if the IRA holder is less than 59.5?
What are the exceptions to the penalty for a non-qualified Roth IRA distribution?

Rate this Term: Your Rating: Overall Rating: Vote Now!