Common use of Nonqualified Distributions Clause in Contracts

Nonqualified Distributions. If you do not meet the requirements for a qualified distribution, any earnings you withdraw from your Xxxx XXX may be subject to federal income tax and, if you are under age 59½, it may also be subject to a 10% early distribution penalty tax. When you take a Nonqualified distribution for federal income tax purposes your distribution will be treated as coming from the following on a first-in, first-out basis; • Contributions, • Military death gratuity or Servicemembers’ Group Life Insurance (SGLI) payments that you rolled over to a Xxxx XXX • Conversion contributions and employer-sponsored retirement plan rollovers • Earnings Therefore, your nonqualified distributions will not be taxable to you until your withdrawals exceed the amount of your annual contributions, rollovers of your military death gratuity or SGLI payments, and your conversions and employer-sponsored retirement plan rollovers made to any 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

Nonqualified Distributions. If you do not meet the requirements for a qualified distribution, any earnings you withdraw from your Xxxx XXX may be subject to federal income tax and, if you are under age 59½, it may also be subject to a 10% early distribution penalty tax. When you take a Nonqualified distribution for federal income tax purposes your distribution will be treated as coming a come from the following on a first-infirst -in, first-out basis; • Contributions, • Military death gratuity or Servicemembers’ Group Life Insurance (SGLI) payments that you rolled over to a Xxxx XXX • Conversion contributions and employer-sponsored retirement plan rollovers • Earnings Therefore, your nonqualified distributions will not be taxable to you until your withdrawals exceed the amount of your annual contributions, rollovers of your military death gratuity or SGLI payments, and your conversions and employer-sponsored retirement plan rollovers made to any 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

Nonqualified Distributions. If you do not meet the requirements for a qualified distribution, any earnings you withdraw from your Xxxx XXX may be subject to federal income tax and, if you are under age 59½, it may also be subject to a 10% early distribution penalty tax. When you take a Nonqualified distribution for federal income tax purposes your distribution will be treated as coming a come from the following on a first-in, first-out basis; • Contributions, • Military death gratuity or Servicemembers’ Group Life Insurance (SGLI) payments that you rolled over to a Xxxx XXX • Conversion contributions and employer-sponsored retirement plan rollovers • Earnings Therefore, your nonqualified distributions will not be taxable to you until your withdrawals exceed the amount of your annual contributions, rollovers of your military death gratuity or SGLI payments, and your conversions and employer-sponsored retirement plan rollovers made to any 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