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Non-Qualified Distribution

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Non-Qualified Distribution
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.

Notes:
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%.


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