Common use of EARLY DISTRIBUTIONS FROM A XXXX XXX Clause in Contracts

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.