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Non-Qualified Distribution
(redirected from Nonqualified Distributions)

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Non-Qualified Distribution
A distribution from an IRA, 401(k), education savings plan, or similar vehicle that is subject to income tax when it otherwise would not be. Generally speaking, a distribution is non-qualified when one makes it before a certain age (for a retirement plan) or in excess of a certain amount (for an education plan). Non-qualified distributions may also be subject to excise taxes.


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Beginning in 2011, nonqualified distributions from HSAs and Archer MSAs will be subject to an excise tax of 20% (increased from 10% for HSAs and 15% for Archer MSAs).
1, the excise tax for nonqualified distributions from Health Savings Accounts will go from 10 percent to 20 percent.
Nonqualified distributions from Roth IRAs, however, are included in gross income only to the extent that earnings are distributed, and earnings must represent a proportionate part of each distribution.
 
 
 
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