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Qualified Distribution

The term “Qualified Distribution” is often used in the context of a Roth Individual Retirement Account (IRA) in the United States.

A Qualified Distribution from a Roth IRA is one that is tax-free and penalty-free. For a distribution to be considered “qualified,” it must satisfy both of the following requirements:

  1. The distribution is made at least five years after the first contribution to any Roth IRA of the account holder. This five-year period begins on the first day of the tax year for which the contribution was made.
  2. The distribution is made:
    • After the account holder reaches age 59.5,
    • Because the account holder has become disabled,
    • To a beneficiary or the estate of the account holder after the account holder’s death, or
    • For a first-time home purchase (up to a $10,000 lifetime limit).