Definition
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
