Save time with our cheat sheets, fact sheets, checklists & books!

February 16, 2009

Nonqualified distribution

Your Guide



A distribution from a Roth IRA or ESA that does not meet the requirements to be treated as a Qualified distribution- ESA  or a Qualified distribution- Roth IRA

Referring Cite

IRC §530, IRS Publication 970, IRC §408A (d)(2), IRC §408A(d)(5), IRS Publication 590

Additional Helpful Information

  • Nonqualified distributions may be subject to income tax and early distribution penalties
  • For Roth IRAs, the ordering rules are used to determine if a distribution is subject to income tax and/or the early distribution penalty
  • For ESAs, the  amount attributable  to earnings on a nonqualified distribution may be subject to income tax and the early distribution penalty

Keep Learning

Domestic abuse distribution

A domestic abuse distribution is one that is made to domestic abuse victim, during the 1-year period beginning on any date on which the individual

Eligible retirement plan

The term “eligible retirement plan”, means a retirement plan to which a rollover contribution can be made. These are: (i)an individual retirement account described in

Qualified See-Through Trust beneficiary

Definition A qualified trust beneficiary is a trust that satisfies the requirements so as to be treated as a designated beneficiary.   For retirement accounts inherited

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Be among the first to know when

IRA Rules