EARLY DISTRIBUTIONS FROM A XXXX XXX. Early Distribution Penalty Tax – If you are under age 59½ and receive a nonqualified Xxxx XXX distribution, an additional early distribution penalty tax of 10% generally will apply to the amount includible in income in the year of the distribution. If you are under age 59½ and receive a distribution of conversion amounts or employer-sponsored retirement plan rollover amounts within the five-year period beginning with the year in which the conversion or employer-sponsored retirement plan rollover occurred, an additional early distribution penalty tax of 10% generally will apply to the amount of the distribution. The additional early distribution penalty tax of 10% generally will not apply if one of the following exceptions apply. The 10% penalty tax is in addition to any federal income tax that is owed at distribution.
EARLY DISTRIBUTIONS FROM A XXXX XXX. The earnings portion of distributions made prior to the end of the five- year holding period, or which fail to meet the criteria as outlined in “Taxation of Xxxx XXX Distributions”, are subject to ordinary income taxes. The earnings portion of the distribution is also subject to the 10% penalty tax on early distributions unless one of the following exceptions applies to the distribution:
