Xxxx XXX Distributions. You, or after your death your beneficiary, may take a Xxxx XXX distribution at any time. Income and penalty taxes may be avoided by taking qualified distributions.
Xxxx XXX Distributions. Distributions from your Xxxx XXX are not includible in your gross income provided that they are “qualified distributions,” meaning they are made after the five-year period beginning with the first tax year for which a contribution was made to your Xxxx XXX; and the distributions are made on or after the date you reach age 59½, are attributable to your disability, made to a beneficiary or to your estate after your death, or made for the first-time purchase of a home. Distributions which are not qualified may be taxable. There is a set order in which contributions (including conversion contributions and rollover contributions from qualified retirement plans) and earnings are considered to be distributed from your Xxxx XXX: first from regular contributions, followed by conversion and rollover contributions on a first-in, first-out basis, and then followed by earnings on contributions. Rollover contributions from other Xxxx IRAs are disregarded for this purpose. Non-qualified distributions from your Xxxx XXX before age 59½ are subject to a 10% additional tax unless the distribution meets an exception. This 10% additional tax does not apply to the portion of your Xxxx XXX distribution that is not includible in your income. The 10% additional tax does not apply if certain exceptions are met, such as for medical or educational expenses, and first home purchases. Special rules apply to certain qualified disaster distributions, corona-virus related distributions, qualified birth or adoption distributions, distributions to terminally ill individuals, distributions for emergency personal expenses, and distributions to domestic abuse victims. In some cases, you may be able to recontribute such distributions at any time during the three-year period beginning on the day the distribution was received, subject to certain limitations. No distribution can qualify for capital gains treatment or for the five-year or ten- year averaging that is available with respect to certain lump sum distributions from other types of retirement plans. You should consult with your tax advisor regarding the tax treatment of distributions from your Xxxx XXX.
