Common use of Nonqualified Distributions Clause in Contracts

Nonqualified Distributions. If you receive a distribution from your Xxxx XXX that does not constitute a qualified distribution, a portion of it may be taxable and may be subject to the 10% early distribution penalty tax (if you do not qualify for an exception). You must apply the ordering rules discussed above to determine whether part of your nonqualified distribution represents a taxable amount. Nonqualified distributions of conversion amounts and amounts rolled over from employer retirement plans distributed within five years of the conversion may be subject to the 10% early distribution penalty tax, explained below.

Nonqualified Distributions. If you receive a distribution from your Xxxx XXX that does not constitute a qualified distribution, a portion of it may be taxable and may be subject to the 10% early premature distribution penalty tax (if you do not qualify for an exception). You must apply the “ordering rules rules” discussed above to determine whether part of your nonqualified distribution represents a taxable amount. Nonqualified distributions of conversion amounts and amounts rolled over from employer retirement plans distributed within five years of the conversion may be subject to the 10% early premature distribution penalty tax, explained below.