What are Roth IRA Qualified Distributions?
Qualified Distributions from a Roth IRA are tax and penalty free. In order to be a qualified distribution, there are two requirements that must be met: 1. The distribution must occur at least five years after the Roth IRA was first established and funded; and, 2. One of the following requirements also must be met: a. The Roth IRA owner must be at least age 59 1/2 years old, b. Distributed assets limited to $10,000 are used towards the purchase of a first home for the Roth IRA holder or a qualified family member, c. The Roth IRA owner is disabled; or, d. The assets are distributed to the beneficiary of the Roth IRA owner after the owner’s death. Distributions that do not meet the above criteria are considered non-qualified and may be subject to income tax and a 10% early distribution penalties.
